They also demanded an end to inverted duty structures in many areas of manufacturing so that a fillip to the Make-in-India initiative could be given. They also sought deferment of the General Anti-Avoidance Rules (GAAR) by two years from its slated implementation from the next financial year.
The various industry bodies — Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (Ficci), Associated Chambers of Commerce and Industry (Assocham) and Federation of Indian Export Organisations (FIEO)— also sought ‘big bang’ announcements in the Budget.
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Jaitley told industry bodies that the infrastructure sectors such as coal, power and cement have been recording double digit growth in the past few months, while growth in the manufacturing sector is still patchy. Manufacturing output declined.
“Reviving manufacturing, diversifying its base and equipping it for robust long run expansion was one of the major challenges of the government’s economic management,” the finance minister was quoted as saying in an official statement.
Jaitley said ease of doing business is a high priority of the government. “We are working on a task given by the prime minister to improve India’s ranking on the ease of doing business index.”
Reform measures undertaken by the present government in coal sector, insurance and amendments in the land acquisition Act, etc, will make a major difference in improving the Indian economy’s performance, he said.
To revive consumption and savings, the industry bodies said there was a need to increase the disposable incomes of households, with more of tax exemptions.
For rationalising expenditure, they suggested all subsidies be made available only to below-poverty line households. “We need to follow strict budgeting on subsidies and prices should be raised if the amount allocated in the Budget is exceeded,” said CII’s Shriram.
The industry bodies also pressed for a stable tax policy and expeditious implementation of the proposed goods and services tax.
“We had a good discussion. We raised several issues. The rate of MAT should be restricted to 10 per cent. Developers and units in Special Economic Zones should be provided relief from MAT and DDT (dividend distribution tax),” CII president Ajay Shriram told reporters.
Ficci president Jyotsna Suri said there should be “a genuine non-adversarial and conducive tax environment” for the economy to flourish. “There is a revenue target given to tax officers and because they have to attain that, they often use irrational demands and coercive methods. They should not be judged on achievement of targets,” she said.