Finance Minister Arun Jaitley on Wednesday asked India Inc to make investments in the infrastructure sector to “build a stronger India”, even as industry leaders called for across-the-board reduction is tax rates for businesses and individuals to spur growth and increase overall tax collections.
On Wednesday, Mr. Jaitley met business leaders and representatives from various industry bodies for a Pre-Budget Consultation meeting. The Finance Minister said that private investment, along with public and foreign investment was the key to boost growth and create job opportunities, according to an official statement.
Demand for fewer slabs
Industry captains also called for reducing the number of tax slabs under the GST regime from seven at present, even as they sought to bring sectors such as petroleum, electricity, realty and alcohol under its ambit.
Mr. Jaitley will present the Union Budget 2018 on February 1. This will be the first Budget after the implementation of the new indirect tax regime, and the last full Budget before the 2019 Lok Sabha election. Pointing out that the overall tax burden on Indian corporates is one of the highest in the world, Shobana Kamineni, president at Confederation of Indian Industry (CII) said the roadmap for corporate tax rate for India should include reducing it to 18% (all inclusive) at the earliest with withdrawal of tax incentives and exemptions and withdrawal of surcharges and cesses.
FICCI president Pankaj R. Patel said there was a need to “consider across-the-board tax rate cuts for businesses and individuals in India to spur domestic investment and demand, and to retain India’s overall competitive environment globally.” He added that while a roadmap for bringing down corporate tax rates to 25% was laid out in the earlier budget, it had not been implemented yet.
“One also needs to consider the impact of the Dividend Distribution Tax and the Buyback Tax. Together with the basic corporate income tax, this pushes India’s overall tax rate for companies well beyond 40%, which is quite high,” Mr. Patel said.
On GST, the industry sought not more that three or four tax slabs.
“There is a need for convergence to 3-4 rates and to include all excluded items till date. Efforts should also continue to simplify compliance related to GST,” Mr. Patel said.
FICCI also sought clarity on anti-profiteering provisions under GST, specifically related to its applicability at the product or entity level, clarity on examination at State or Central level and applicability on products and stocks prior to GST.
Other major demands on the industry’s Budget wishlist included permitting the purchase of Banks’ Recapitalisation Bonds by the institutes and the public at large, reducing government stakes in Public Sector Banks, allowing banks to securitise their loans and sell the same, setting up of a land bank corporation for monetisation of government lands including those belonging to the Army, Railways and public authorities.
They also suggested creation of a National Innovation Fund with initial corpus of ₹10,000 crore to promote innovation and ‘Out of Box’ ideas and setting up of an Empowered Group of State Agricultural Ministers to implement agricultural reforms.
The industry leaders also recommended bringing in a ‘Scrapes Scheme’ to take more than 15-year-old heavy commercial vehicles off the road since demand in this sector is at its peak today. This, they pointed out, would help in generating lot of employment opportunities as it would bring about largescale private investment in this sector.
