India's 2006-07 GDP growth to be at 8.5 pc: Credit Suisse
New Delhi: Credit Suisse, global financial services major, says India's gross domestic product (GDP) growth forecast for 2006-07 would be around 8.5 per cent as against the consensus 7.6 per cent. This it says is on the back of signs of improvement in the fiscal and monetary conditions in the economy.

Credit Suisse in its quarterly report on emerging markets, has said that growth was broadening with the industrial production growth posting 10 per cent in financial year 2006-07 so far, as against an average 8.2 per cent in the past two years. It said it also expected S&P to upgrade by one notch to BBB- the foreign currency sovereign rating of India by early Q4 2006.

Credit Suisse has also revised down the forecast of the country's combined state and central fiscal deficit (general government fiscal deficit) to six per cent of GDP from seven per cent for financial year 2006-07 and to 5.4 per cent from 6.4 per cent for financial year 2007-08.

On the inflation front, Credit Suisse expects that the wholesale price index inflation may accelerate to 5-5.5 per cent in Q3 of FY 06/07 versus 4.3 per cent in 1H FY 06/07.

It's reverse repo rate forecast is 6.5 per cent by end FY 06/07 as against the current six per cent.
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Tax breaks sought by food processing industry
New Delhi: The food processing industry has sought tax breaks for setting up cold chains throughout the country. Spokespersons of the industry say that though India is one of the largest producers of vegetables and fruit, a large quantum is wasted due to lack of storage and processing facilities.

Therefore they have argued for a tax holiday under Section 10 A of the Income Tax Act for cold chains along with excise and customs sops for procurement of capital goods, including refrigerated vans. This could also boost the country's farm exports and provide better returns for farmers.

Representations submitted to the government by apex chambers, say tax concessions should cover the entire supply chain for the food processing industry. The sector needs a boost in view of the growing demand for processed foods and evolving food patterns. Proposals from all industry representatives are expected to reach the finance ministry by October 15, the early deadline set to examine proposals in detail.
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Pakistan allows increased imports from India
Islamabad: Pakistan has decided to allow imports of machinery, surgical items, chemicals and pharmaceuticals from India.
Trade between the neighbours is on the upswing due to improving relations between the two countries since 2004. India has granted a Most-Favoured Nation (MFN) status to Pakistan, while Pakistan has yet to reciprocate and instead regulates trade through a list of items deemed tradeable with India.

However, the Economic Coordination Committee, Pakistan's top decision-making body on economic issues, on Wednesday allowed import of more than 302 'tariff lines' from India. Pakistan earlier had put 1,527 tariff lines on the list, covering a total of just under 800 products.

The new additions to the list of permissible items will also include raw materials and metals, diesel locomotives, and textile machinery. While India's surging economy has stolen the spotlight, Pakistan's economy has also been one of the fastest growing economies in the world despite the lack of integration between the two.
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