New Delhi, May 28: India Inc has urged the new government at the Centre to unveil wideranging reforms across sectors to jump-start growth and revive the key farm sector.
In the pre-budget consultation meeting with revenue secretary Ajay Bhushan Pandey, the Confederation of Indian Industry (CII) called for lowering corporate tax rates, maintaining the peak rate of customs duty, kick-starting government expenditure, and rationalising tax deducted at source as well as dispute resolution provisions.
The Federation of Indian Chambers of Commerce and Industry (Ficci) in its budget memorandum has called for reducing the corporate tax for all companies to 25% as proposed earlier, measures to boost exports, abolish angel tax and strengthen the micro, medium and small enterprises sector.
“Employment creation needs a strategic boost, including from the lens of revenue generation. The key sectors to be propelled for more job generation include the tourism ecosystem, the textiles to garments value chain, and farm-to-fork supply in the agriculture and food processing sector,” Vikram Kirloskar, president CII, said. “End-to-end supply chains in the auto industry, construction sector and retail sector also require strong policy attention,” said Kirloskar.
He also called for government measures to boost consumption, investment, government spending and exports and said it was essential to reduce income tax burden and expand the scope of investment allowance to all sectors, including services sector, mining, electricity generation, infrastructure service providers, agriculture and agro-processing sector. The new NDA government is expected to present its full budget in early July and there are expectations that several measures would be unveiled to revive slowing economic growth.
Industry leaders also said the first budget presented by the new government should announce the direction of taxation policy in the country and urged consistency, certainty and continuity of taxation policies for the next five years.
“The government may also consider announcing a road map for tax policy over the next 5 years in order to attract investments,” said Chandrajit Banerjee, director-general of CII. Several suggestions were made on direct tax structure. Dividend distribution tax should be rationalised to 10% and should be taxed at the hands of the recipient and long term capital gains tax on equities and MAT should be removed, the CII delegation said.