New Delhi: A leading industry lobby on Tuesday urged the Government to disinvest its stake in leading public sector companies and banks by up to 49 per cent to revive the economy.
"Navratna status for major public sector banks is the need of the hour to enable them enjoy autonomy and take bolder decisions without government intervention," said Assocham president Sajjan Jindal.
"PSU disinvestment would also stimulate the stock market," said Jindal, who announced that Assocham would submit a 100-day action plan for the government to Prime Minister Manmohan Singh.
The plan urges the Government to accord 'Navratna' status to major public sector banks. A total stimulus package worth Rs 1 lakh crore should be announced to stimulate housing, construction and real estate sectors, the chamber said.
It said that Foreign Direct Investment in insurance sector should be increased from 26 per cent up to 49 per cent. Seeking further reduction in interest rates, Jindal said export zones require sustained support as these have suffered the most in the recent past and may not recover till late 2009 fiscal. Also, the small scale sector should get credit at a lower rate.
Assocham said there is a need to reduce both personal tax and corporate tax by five percentage points so that public spending can be increased.
Besides, a new deadline for Goods and Service Tax (GST) should be rolled out to put it into place by the next year as its introduction by 2010 is likely to get delayed, it added.
It also sought a housing policy to provide houses for rural families within five years based on a 20-year repayment at extremely low interest rates.
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