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CII, FICCI welcome cuts in import duty

CII, FICCI welcome cuts in import duty
PTI
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First Published: Mon, Jan 29 2007. 04 53 PM IST
Updated: Mon, Jan 29 2007. 04 53 PM IST
Industry bodies CII, FICCI and Assocham welcomed the move but said it might not have the desired effect on inflation.
FICCI said the decision to reduce import duty in segments that form key inputs in manufacturing would give a fillip to large projects in manufacturing and infrastructure.
However, the chamber cautioned in case of commodities that are produced domestically as final products, a sharp and sudden cut in customs duty could adversely impact competitiveness of domestic companies engaged in production of such items.
FICCI also said inflation would be best addressed by market forces and supply in the economy would increase to meet rising demand. This, in turn, would help bring down prices through a natural process.
CII President R Seshasayee said in a statement inflation was largely fuelled by rise in prices of food items.
“Therefore, it is quite uncertain as to how much of an effect the customs duty cut for certain industry items would have in easing the plight of the common man,” he said.
He said in the medium and long term, the whole issue of supply side shortages would have to be addressed in a comprehensive manner, since reduction of duties can only serve as short-term responses to a price situation.
Assocham said it welcomed the move as it had sought duty reduction in its pre-budget memorandum.
Justifying the customs duty cut on cement, raw materials and capital goods, the chamber said it was not just rising prices of essential commodities that were fuelling inflation but also prices of cement and aluminium.
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First Published: Mon, Jan 29 2007. 04 53 PM IST
More Topics: Money Matters | Commodities |