Agriculture Sector:
The agriculture sector in India, which constitutes a larger share in total employment, grew at an annual rate of 3.9 percent for the year 2005-06 in comparison to 0.7 percent in 2004-05. The growth rate for the year 2005-06 was mainly due to good monsoon.
The total food grain stocks in the country experienced a slight declining trend. As on 1st August 2005 the total stock of food grains was at 20.97 million tonnes, which declined to 17.21 millions tonnes as on 1st August 2006.
The growth rate of agriculture sector for this year is expected to remain optimistic. Good monsoon in this year is expected to boast the agricultural production.
The agri business sector in India is considered to be one among the key area for overall economic development. The Government has already emphasized for the promotion of agri business sector in the country. Presently India is the third largest agri producer in the world.
Information and Technology Sector:
The Information and Technology sector is considered to be an important area for its contribution to Indian Economy. As to statistics, the software industry in India stands at US $ 29.5 Billions, which is around 20% of country’s exports.
The IT and ITES services sector has become the most emerging sector in India today by creating huge employment opportunities in the country.
In the Union Budget 2006-07, 8% of excise duty was being imposed on packaged software. The incidence increase may be due to more compliance cost and more administration cost. Presently India has become the top destination for IT and IT related services.
The hardware industry in the country is also experiencing a growing trend. Ongoing domestic taxes and levies have imposed some fiscal pressures.
Telecom Sector:
Though the telecom sector in India has experienced a faster rate of growth, still it suffers from the problem of complex tax structure. Presently the sector suffers from the problem of 12% service tax, 6-10% license fee, 2-6 % spectrum charges, 1.5% asset deficit charges, and 2% education cess. Such types of tax system adversely affects to the country’s telecom sector.
A single tax system should be introduced for making the tax system investor friendly. For implementing this, the following steps should be undertaken:
- Reducing custom duties on some capital goods.
- Reducing excise duty on telecom products.
- Abolishment of CST of 4% for the telecom related equipment.
Oil and Gas Sector:
The oil and gas sector in India has experienced a progress in the recent years. Enactment of Petroleum and Natural Gas Regulatory Board Act is considered to be an important development in the in the industry. Apart from this, the Rangarajan Committee Report has helped a lot in measuring the gap between international prices and domestic prices.
The Government should keep special attention on the development of oil and gas industry related infrastructure.
Apart from this, petrol and petroleum related products should come under the VAT by maintaining uniformity in rates across all the states.