Finance Minister Pranab Mukherjee might not cut taxes in the coming Budget and was likely to continue with current rates till the Goods and Services Tax (GST) was implemented, said industry representatives after meeting the minister to give their pre-Budget recommendations.
“The finance minister is not in a mood to cut taxes because it will affect the fiscal deficit targets. However, stimulus measures might be continued and rates can be adjusted when GST is implemented…It has to be continued, stimulus has also benefitted the government,” Venugopal Dhoot, chairman of Videocon Industries Ltd, told reporters after their three-hour-long meeting with the FM.
Rajan Bharti Mittal, vice-president and managing director of Bharti Enterprises, has asked the finance minister to maintain the excise duty at the current level. Mittal is also president of the Federation of Indian Chambers of Commerce and Industry, an industry body.
“We have asked (the FM) to maintain excise duty at the current level…Let the interest rate not harden up because industry is in investment mode and those investments should not become unviable”, Mittal said.
Industry representatives, including Ficci and Videocon, have asked the finance minister to reduce corporate tax from the current 30 per cent to 25 per cent, abolish surcharge and education cess, remove the cascading impact of Dividend Distribution Tax, rationalise Minimum Alternate Tax (MAT) as a specified percentage — 50 per cent — of the basic corporate tax rate.
The industry complained the MAT rate had gone up from 10 to 18 per cent over the last four years, causing difficulties for industry.
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CII President Hari Bhartia also suggested opening FDI limits in sectors, particularly multi-brand retail.
CII also stressed the need to introduce a common market for agricultural produce across states, rationalise the APMC Act and promote public-private participation in agriculture by providing viability gap funding in agri-focused infrastructure and agricultural extension.
Industry expects moderate IIP
Industry representatives today expressed pessimism over the momentum of industrial growth in the coming months, saying the growth rate was going to moderate. Data for industrial growth, as measured by the Index of Industrial Production, for the month of November 2010 will be released tomorrow by the Central Statistical Organisation.