While assuring industry that he would keep his budgetary promise of reducing corporate tax rates, Union Finance Minister Arun Jaitley said here on Sunday that the road map for process of withdrawing exemptions is being readied.
“From next budget, we will start the process of gradually reducing corporate tax rates from 30 per cent to 25 cent. But, we also plan to phase out exemptions and the first such announcement would be in the public domain for discussions very soon,” he said, while participating at an interactive session organised by the Indian Chamber of Commerce. He said that various exemptions in effect reduce the corporate tax rate to around 22 per cent.
Exemptions are also somewhat discretionary he said in an allusion to an earlier point of the Modi-government abolishing things like discretionary allocations (of minerals, spectrum etc) in a bid to curb corruption. Discretionary allocations lay the foundation of corrupt practices, he observed.
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He however tried to assuage feelings by saying that this (withdrawing exemptions) would make filing tax returns simpler.
Pointing that many reforms were in the pipeline, he said that the last parliamentary session was disappointing but educative, when the government could not move ahead on moves where broad consensus had evolved.
It was educative as regional powers lent their support to the government in power although the main political party practised disruptive politics as a tactics (on GST).
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There is need for a debate as to what extent a directly elected party can be prevented, he said adding that the maturity of the Indian political system was being tested.
Agriculture
On the economy, he observed that Indian was in a comparatively bright spot by global standards. “Inflation is under control our current account deficit is among the lowest and the process of transfer of wealth from oil producing countries to oil consuming countries has begun.
The government was expecting a much better show on the agricultural front compared to last year and the economy’s fundamentals were strong…a growth rate of upwards of 8 per cent is achievable” Mr. Jaitley observed.
He said that there was need to open up for investments in sectors, which are not sensitive economically or socially.
The government was also planning to introduce agricultural insurance and a health insurance scheme for senior citizens, he said.
Bandhan Bank
inauguration
The Minister earlier inaugurated India’s newest bank Bandhan Bank saying that institutions like these or the recently proposed payment banks enable people to put their monies in proper places rather than putting them in unprofessional institutions.