Our concern on Depreciation Rate of Machineries and Equipments demanded by Indian Industry in India Budget 2012-2013   Leave a comment

Confederation of Indian Industry (CII) in its Pre budget memorandum for Union Budget 2012-13 has asked the government to announce initiatives that can accelerate the pace of private investments.
– In an important note they have recommended to raise depreciation rates for plant and machinery from 15 per cent to 30 per cent, at least for a period of two years to encourage more capital investment.
– Higher depreciation rate of 50 per cent in case of retrofitting technologies, which are more energy efficient and environment friendly in order to encourage companies to go green.
(Source: http://www.rediff.com/business/report/budget-2012-wishlist-cii-increase-depreciation-on-plant-and-machinery-to-30-per-cent/20120229.htm)
Industry’s argument is that higher depreciation will enable companies to move to zero value for their machines in a shorter span of time. With tax breaks linked to depreciation, companies would be encouraged to replace old equipment sooner. This will not only help manufacturers add capacity but also boost the capital goods sector as the demand for machinery will rise (Source: http://articles.timesofindia.indiatimes.com/2012-02-28/pre-budget/31107139_1_depreciation-rate-investment-allowance-effective-tax-rate)

Worldwide surveys show that a nation’s GDP is significantly affected by corrosion losses. This problem is not only the buzzword for people in Process Industries, but also perennial in public utilities such as metro water supply. We can see contamination of public water through corrosion problems. Our country is loosing crores and crores of money in replacing the old equipments due to corroison problems. If higher depreciation rate is allowed, industries will be encouraged to replace the equipments quite frequently with no focus on material conservation efforts. Industries must be encouraged to follow corrosion control practices for saving this huge corrosion cost. Corrosion Prevention has been introduced in the US to encourage the company for getting credit FOR CORROSION PREVENTION AND MITIGATION MEASURES FOR Energy-related property.

We need to work in the direction of conserving our precious material resources. We would like to have your valuable opinion on this issue for representing our united efforts to the Finance Ministry, Govt of India.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


Get every new post delivered to your Inbox.

%d bloggers like this: