New Delhi, October 28:

Consumer durables sector in India is poised to increase by at least 12 per cent due to increased choice and preferences, states a survey by Federation of Indian Chambers of Commerce and Industry (FICCI).

The segment recorded a growth of 11.5 per cent in 2006-07 against 8.5 per cent in the previous year. During April-Sep 2007, the overall growth of consumer durables industry has been 13 per cent. Hence, the industry is expecting the overall growth in 2007-08 to be 12 per cent, the survey stated.

According to industry organisation FICCI, the sector would be witnessing such exponential

growth based on a paradigm shift in consumers’ mindset, which is giving rise to huge demand of luxury goods coupled with rising purchasing power.

This growth can also be witnessed in the rural areas where the market is growing at 25 per cent compared with urban areas where the growth rate is 7-10 per cent. The fast growing segments that have driven growth of this sector are flat panel TVs, LCD TVs, plasma TVs, slim TVs, frost-free refrigerators, fully automatic washing machines, split air-conditioners, DVD players, microwave ovens and home theatre systems etc.

The survey also noted that the growth in production has been more in terms of quantity or volume rather than growth in value terms for a number of products. Consumers have also been encouraged to buy such goods due to consumer loan schemes with reduced interest rates over the years by commercial banks and financial institutions.

Meanwhile, a leading Indian industry organisation has in a report urged the finance ministry for an efficient goods and services tax (GST) regime that would eliminate distortions and lower taxpayers’ burden. A simple and liberal tax administration would enhance public finances and enable better revenue collection, states the report by the Confederation of Indian Industry (CII).

Suggesting a roadmap for a better GST model, the CII has recommended that central GST should include central excise, service tax and education cess. “State GST sh-ould include a combination of all taxes presently levied by states and octroi levied by municipalities.”

It suggested that tax on the sale of property be levied on value addition under state GST and not on the total amount, as applicable presently. Municipalities should get financial support from the states to meet their expenses and should be allowed to impose only property tax, the CII said, adding that the responsibility to collect taxes should be divided in a strategic manner between the centre and the states. The chamber also urged the central government to examine and implement the recommended model soon.