'Govt should cut corp tax to incr manufacturing goods exports'

New Delhi, Oct 12 (PTI) Concerned over steep fall in the
country's industrial growth, business chamber Federation
of Indian Chamber of Commerce and Industry (F.I.C.C.I.) has
asked the government to cut the rate of corporate tax to the
level in the competing countries like China and encourage
exports of manufacturing goods.

"Currently, the combined tax level in India is between 28
to 35 per cent, which is much higher than that in China (17
per cent)," the chamber said in its study on India's
manufacturing sector exports.

The manufacturing sector put out a dismal performance in
August this year growing by a mere 1.1 per cent against 10.7
per cent in the same period a year ago. The scenario on the
export front is also not very encouraging, F.I.C.C.I. said.

At present, India's share in world manufacturing goods
exports is only 1 per cent. The share of manufacturing goods
in country's total exports has fallen to 63.6 per cent in
2007-08 from 76 per cent in 2001.

In case of China, the share of manufacturing goods in a
total exports is over 90 per cent, F.I.C.C.I. said.

At current pace, even Turkey's share in world
manufacturing goods trade would surpass that of India by 2011,
while that of China would be 16 times more than that of India,
the chamber said.

So, promoting exports of manufacturing sector should be
central to the Foreign Trade Policy of India, F.I.C.C.I. said.

There is an urgent need for rationalisation of state
level taxes, which are in the range of 6 per cent of export
price of manufactured item, it said.

These taxes could be refunded by the Centre to exporters
which could be adjusted in the amount to be released by the
central government under the Plan to states, it added.

To reduce the time and cost for clearance for exports,
F.I.C.C.I. said that government should rationalise procedures
and benchmark it to international levels.

The chamber also asked to focus on the policy required
for exports of high technology items, as such products are
going to occupy more share in the trade in years to come.

Government should also look into promoting two or three
mega Manufacturing Investment and Export Regions that would
provide world class export infrastructure to exporters in the
country, F.I.C.C.I. said.