Vajpayee vows to hasten highway project
City chambers seek sales tax rollback
Shree Rama to double capacity

New Delhi, Jan 8 
The golden quadrilateral highway project will be completed by 2003, a year ahead of schedule, Prime Minister Atal Behari Vajpayee said here today.

Addressing the first meeting of the reconstituted economic advisory council, Vajpayee said the corporatisation programme of major ports has been finalised.

The meeting was attended by finance minister Yashwant Sinha, deputy chief of the Planning Commission K.C. Pant, member Planning Commission Montek Singh Ahluwalia and secretary in the Prime Minister’s Office N.K. Singh.

“The fiscal deficit is unacceptably high. It needs to be addressed urgently through a reduction in government expenditure and improvement in revenue collection. Rationalisation and reduction of subsidies, both direct and indirect, must be an integral part of this effort,” Vajpayee said.

The government, he said, will shortly decide on handing over some important airports such as Calcutta, Mumbai, Delhi and Chennai to private operators on long-term lease.

Sources said the government will shortly appoint a KPMG-led consortium as technical and financial advisor to assist it in working out the modalities of extending the lease of the four metro airports to private operators.

Indicating that about 500 km of the 5,950-km golden quadrilateral highway has already been completed, Vajpayee said further work for about 1,000 km is being awarded.

The remaining work will be awarded in the next two years, he said, adding that the ambitious project will be advanced by one year so that it is completed before the scheduled date of 2004.

Of the 6,300-km north-south-east-west road corridor, 630 km has been completed and the programme of construction of the remaining stretches is being firmed up, he said.

Vajpayee said the government will also introduce a Bill in Parliament for the creation of a dedicated fund based on the cess on petrol and diesel to enable leveraging of finance for this large project.

Talking about some of the problem areas in the economy, he said the fiscal situation in the states was a matter of great concern. “A majority of the states are today exhibiting structural weaknesses. These include disproportionate increase in revenue expenditure, inadequate capital expenditure, inadequate growth in tax and non-tax incomes, unsustainable revenue and fiscal deficits and a very high level of debt.”

He laid emphasis on speedy disinvestment of public sector undertakings and financial sector reforms.

Highlighting the government’s attempts to push the telecom and information technology sectors forward, he said, “We have constituted a group on the convergence of telecom and infotech sectors under the finance minister to ensure bottlenecks are removed at the earliest. The group is making good progress. The sub-group under the minister of state for information technology Arun Jaitely will submit its report on issues related to the Telecom Regulatory Authority of India by the middle of the month.”

N.K. Singh later told reporters that the economists wanted the government to take immediate steps to rein in the fiscal deficit which was widening at an alarming rate.

Most of them discussed the issue of states not levying adequate user charges. They also talked about the high interest rates and that majority of the states exhibited serious structural weaknesses.

A disproportionate increase in revenue expenditure, inadequate growth in tax and non-tax incomes and a very high level of state debt were some of the major issues of concern, he said.

The Prime Minister also sought greater consensus among economists on the issue of disinvestment of government shares in PSUs, Singh said.

The economists were of the view that to deal with the mounting non-performing assets in public sector banks there was a need to set up an asset reconstruction company besides strengthening the legal structure and the debt recovery tribunal.

With the positive signs of economic recovery coupled with a low rate of inflation, Vajpayee said there was good reason to believe that the year would end with a growth rate of 6 to 6.5 per cent.    

Calcutta, Jan 8 
All the six city-based industry chambers have urged the West Bengal government to review the recent hike in sales tax rates on some selected items, imposed to conform with the uniform sales tax regime.

The presidents of the Indian Chamber of Commerce, Bengal Chamber of Commerce and Industry, Bharat Chamber of Commerce, Merchants’ Chamber of Commerce, Bengal National Chamber of Commerce and Industry and the Calcutta Chamber of Commerce, issued a joint press release in this regard today.

The release urged the government to take steps to “ensure that business and industry are able to survive and retain competitiveness.”

The heads of the trade and industry bodies have also sought a joint meeting with chief minister Jyoti Basu to present their concerns regarding the state’s economy.

The chamber chiefs also suggested the formulation of a single model sales tax law for all the states, which would lead to common interpretations and a common tax structure. This will facilitate the move towards a uniform sales tax regime, they added.

The chiefs of the local chambers felt that the recent hike in tax rates would create distortions between states which have implemented the uniform tax regime and those which are yet to do so.

“The tax rate hike would provide an unfair competitive advantage to certain states at the expense of others, by creating an artificial diversion of trade to the states where tax rates are lower,” they said.

Further, they emphasised that the concept of a uniform sales tax would only be successful if there was a single tax rate for each product.    

Calcutta, Jan 8 
Shree Rama Multi-Tech Ltd, the country’s second largest plastic tubes packaging company, plans to double its production capacity and is targeting a sales turnover of Rs 220 crore this year, to close in on market leader Essel Packaging.

Spurred by the exponential growth posted by its FMCG clients, SRMT plans to double its production capacity of laminated tubes from 352 million to 640 million.

SRMT, which began commercial production in 1995, clocked a turnover of about Rs 150 crore in 1999 and a profit after tax of Rs 34 crore.

“Shree Rama has put in place a three-fold expansion plan to keep pace with the increased demand and the changing profile of end-user industries,” said S.I. Patel, the chief executive officer of the company.    


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