Topic: Economic Associations in India and their impact on economic policies.

With special reference to FICCI

ABOUT FICCI Established in 1927, FICCI is the largest and oldest apex business organisation in India. Its history is closely interwoven with India's struggle for independence and its subsequent emergence as one of the most rapidly growing economies globally. FICCI plays a leading role in policy debates that are at the forefront of social, economic and political change. Through its 400 professionals, FICCI is active in 39 sectors of the economy. FICCI's stand on policy issues is sought out by think tanks, governments and academia. Its publications are widely read for their in-depth research and policy prescriptions. FICCI has joint business councils with 79 countries around the world. A non-government, not-for-profit organisation, FICCI is the voice of India's business and industry. FICCI has direct membership from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 83,000 companies from regional chambers of commerce. FICCI works closely with the government on policy issues, enhancing efficiency, competitiveness and expanding business opportunities for industry through a range of specialised services and global linkages. It also provides a platform for sector specific consensus building and networking. Partnerships with countries across the world carry forward our initiatives in inclusive development, which encompass health, education, livelihood, governance, skill development, etc. FICCI serves as the first port of call for Indian industry and the international business community.

FICCIs State Initiatives

FICCI States Division, headquartered at New Delhi is the nerve centre for initiatives undertaken in various States and has as its agenda, inter-alia, the following activities:

Stimulating and strengthening the reform process in the States Catalyzing and channelizing investment flows to the State specific thrust sectors Facilitating and promoting two - way trade flows in goods and services Building and fostering public private partnerships and extending the corporate social responsibility agenda among the corporates Encourage and help Indian enterprises to globalize Providing Value Added Services like energy audit, environment audit, water management, B2B meetings, information services etc to enterprises in various States

These activities are coordinated through FICCIs Regional and State offices at Jaipur, Kolkata, Hyderabad, Chennai, Bangalore, Mumbai and Ahmedabad and FICCIs specialized divisions based at New Delhi

FICCI On RBI Credit Policy

Reacting to the RBI credit policy announcement, Dr. Amit Mitra, Secretary General, FICCI said This is the best bargain in the prevailing situation. RBI has kept an eye on growth, while addressing the issue of inflationary pressures. We congratulate RBI for this carefully calibrated approach. However, FICCI had wished that the reverse repo rate would not have been raised so that banks do not resort to parking of funds at the LAF window. In any case, the 25 basis points hike in reverse repo is still moderate and should not encourage banks to park large additional funds with the RBI.. >The RBI has been sensitive to the need for controlling inflation as well as not hampering growth drastically. The 25 basis points hike in repo rate would certainly put pressure on interest rates. However, given the situation we expect lending rate hike should not be imminentt, he added. >The squeeze on liquidity by raising CRR by 25 basis points will also have an impact on the market. However given the prevailing liquidity conditions this should not be too hard eitherr, he added. >What FICCI will advocate is that any further hike later in the year should be viewed with great caution. The RBI has already noted that overall inflation should show moderation and keeping that in mind RBI should maintain a stable interest rate regime. Unless this is done, domestic demand will be affected and will in turn slowdown the pace of economyy, said Dr. Mitra.

Major Achievements Over the Years

FICCIs efforts led to a change in government policy whereby the Indian film sector was granted industry status.

Income tax rebate of 50% on profits: The Income Tax Act introduced in April 2002 allowed multiplexes tax rebate to the tune of 50% on book profits. Tax holiday for 5 years: Several state governments are introducing exemptions from payment of entertainment tax. Maharashtra provides for a 100% tax holiday for 3 years, and 75% tax holiday for 5 years, without any limit in terms of capital investment.

Lowering of Entertainment Tax in various states: Entertainment taxes in various states of India have been lowered. Taxes in Karnataka are down to 30% from 40.

Spearheading the 2nd Phase of Privatization FM Radio Broadcast Policy ; the committee was chaired by Dr Amit Mitra, Secretary General, FICCI.

Key policy issues being addressed currently:

Copyright act for film producers : Copyright period to be extended from 60 to 100 years.

3rd Phase of privatization of FM Radio in India

Tax related issues for the Multiplex; Animation and Gaming and VFX industries

Broadcasting services regulation bill including self regulation and content code for the television industry

Submissions made to the govt on changes in policy framework

Roadmap for the Development of Indian Animation, Gaming and Visual Effects (VFX ) Industry, to the I & B Ministry in keeping with FICCIs commitment to this important part of the entertainment sector.

A memorandum to the Ministry of Information and Broadcasting and TRAI towards the development of Indian FM Radio Industry.

On behalf of the Multiplex Association of India (MAI), a body formed under the aegis of FICCI, an appeal to reduce the level of Entertainment Tax in the states, and to bring about certain concessions for the film exhibition trade, necessary for the survival of the exhibition sector.