In a pre-budget meet with finance minister Pranab Mukherjee on Monday, representatives of industry chambers, the CII, FICCI, Assocham and several industrialists demanded a cut in direct tax rates, sought the removal of fringe benefit tax and asked for an investment-oriented budget to stimulate the economy.
The industry bodies also sought re-introduction of investment allowance besides an increase in depreciation rates of plant and machinery from 15-25 per cent. As government borrowing through market squeezes money available for private investment, the government should look at printing more currency notes to finance its fiscal deficit, it was suggested.
"We talked about reducing corporate tax rates a bit... we also talked about bringing down personal income tax rates, if possible. We suggested that income tax exemption limit be raised from Rs.1.5 lakh to Rs.2.5 lakh or Rs. 3 lakh," FICCI President Harshpati Singhania said. The FICCI made a case for a big push to disinvestments and suggested the reduction in excise duty, service tax and urged that rationalization of custom duties should be continued for one more year.
The CII called for easing individual tax exemption limits and emphasized the need to undertake large 'Innovative India' investments in physical and social infrastructure that would accelerate internal growth momentum. It also asked for a separate infrastructure monitoring and implementation agency to raise efficiency of expenditure. The budget should focus on education and skill development, and allocation for the National Skill Development Corporation could be increased to kick start new initiatives for youth, it said.
CII President Venu Srinivasan called for a significant investment in infrastructure and suggested that additional public funds could be mobilized through disinvestments in select public sector units, attracting foreign exchange by issuing sovereign-backed bonds, and widening the tax base as well as maintaining the pace of efficiency in tax collection.
The Associated Chambers of Commerce and Industry of India (Assocham) proposed a reduction in excise duty for textile machineries from 14% to 8% with a view to encourage the indigenous demand and production substantially. The Assocham also pointed out that floor level of customs duty on capital goods should be charged @ 7.5% and the rate of duty on raw materials, parts, components & accessories should be less than that on complete machinery.
The meeting that lasted for more than two hours was attended by the heads of industry bodies besides industrialists like Bharti chairman Sunil Mittal, Videocon chairman Venugopal Dhoot, K. Ravi Kumar, CMD of Bharat Heavy Electricals, Gautam Singhania, chairman and managing director of Raymond, Larsen & Toubro chairman AM Naik, Mahindra & Mahindra chairman Anand Mahindra, Tulsi Tanti, chairman and managing director of Suzlon Energy and others.
Anand Mahindra stressed the need for a large new deal that would transform the economy. " We should push highways development and help complete the left over work in the North-East-West- South corridor, he said.
A M Naik suggested a " big infrastructure push" in the budget and asked for restoring tax exemption on export profits. Sunil Bharti Mittal said that infrastructure should be given a fillip in every form. He also asked for rationalization of duty structure in the telecom sector.
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