Special Correspondent

Asks industry leaders to list out hurdles

Tax rates in India are moderate Invites industry leaders on May 1 for a meeting

NEW DELHI: Union Finance Minister P. Chidambaram on Saturday asked corporates to make a list of hurdles in the way of larger investments and higher growth of the manufacturing sector.

Justifying the removal of tax exemptions at a post-budget conference organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) here, Mr. Chidambaram said: "Every company, which is profit making, should pay tax... We have addressed the concerns on FBT [Fringe Benefit Tax] and many others. Some may still remain. Settle down and make more investment.''

He asserted that the tax rates in India were moderate compared to other parts of the world while, at the same time, pointing out that companies, which were growing aggressively, did not complain about taxes. Inviting the industry leaders for a meeting on May 1 to remove the bottlenecks that impede higher growth, Mr. Chidambaram said: "Come and tell me what stands between you and investment'' for pushing up manufacturing growth to 12 per cent. "I will help you achieve your growth targets and investment plans," he said.

Explaining why a much higher growth in the manufacturing sector was essential for sustaining an overall economic growth of 10 per cent, the Finance Minister said: "With growth there is a chance of addressing the problem of poverty. Without growth, there is no chance."

Mr. Chidambaram sought to defend the restoration of long-term capital gains tax on companies paying the Minimum Alternate Tax (MAT) by pointing out that these companies had to pay a third of the tax that other profit making companies pay. "MAT companies unwittingly got the exemptions...We should put the MAT discussions to a close,'' he said.

Mr. Chidambaram noted that there was no question of withdrawing the capital gains tax on securities of unlisted companies. "[The] world over, long-term capital gain is taxed. Sale of property and other immovable items continues to attract the tax,'' he said.

"Only shares listed in stock exchanges have been exempt, but they attract Securities Transaction Tax,'' he said.