The big guns of India Inc skipped the pre-Budget interaction with finance minister Pranab Mukherjee on Friday, even as other industry representatives suggested boosting economic activities, which have been hit hard by external headwinds and the Reserve Bank of India (RBI)’s tight monetary stance for most part of this financial year.
Sources privy to the development said though invitations were sent to Tata Sons chairman Ratan Tata, Reliance Industries chairman and managing director Mukesh Ambani, Reliance Anil Dhirubhai Ambani Group chairman Anil Ambani and Aditya Birla Group chairman Kumar Mangalam Birla, they did not turn up.
Bharti Enterprises chairman and group chief executive Sunil Bharti Mittal, Larsen & Toubro chairman and managing director A M Naik, Raymond group chairman and managing director Gautam Singhania, Biocon Ltd chairman and managing director Kiran Mazumdar Shaw, Asian Paints’ Ashwin Dani, Mahindra & Mahindra Group’s Keshav and Anand Mahindra and Essar Steel Holdings’ J Mehra were also invited. However, they, too, did not attend the meeting.
Industry chamber and associations representatives, ITC chairman Y C Deveshwar, Hindustan Uniliver chief executive Nitin Pranjpe, Suzlon Energy chairman and managing director Tulsi R Tanti, BHEL chairman and managing director B P Rao and Medanta chairman Naresh Trehan met the finance Minister and suggested ways to boost the economy’s sagging growth.
They asked the finance ministry to retain the current tax rates. However, exemption limits should be increased in the Budget to promote growth, they said. They also demanded healthcare services be kept outside the ambit of service tax and that the minimum alternate tax (MAT) be rationalised.
Mukherjee said the government and the industry had to collectively address the challenges, which declining growth, inflation, and fiscal and revenue deficits.
The representatives also made a case for giving infrastructure status to aviation, telecom, healthcare and education sectors, early implementation of the Goods and Services Tax (GST), and continuation of the interest rate subvention scheme for exporters till March 31, 2013.
"We asked for infrastructure status for the healthcare and education sectors. We also sought speeding of PSU (public sector unit) disinvestment, widening the tax net and implementing the GST as fast as possible," said Confederation of Indian Industry president B Muthuraman.
Pitching for widening of personal income tax slabs, R V Kanoria, president, Federation of Indian Chambers of Commerce and Industry, said a 30 per cent tax slab should be applicable to individuals with an annual income of more than Rs 10 lakh. The Direct Taxes Code Bill, being vetted by the Parliament standing committee on finance, seeks to impose the highest income tax rate on annual income of over Rs 10 lakh. "We have made a case for retaining the tax rates at the present levels. There should be no increase in corporate tax, service tax and excise duty," Kanoria said.
However, Rajkumar Dhoot, president, Associated Chambers of Commerce and Industry of India, said he had sought reducing the corporate tax rate by two-three percentage points and excise duty by one-two percentage points from their current levels.
Kanoria said the existing rate of MAT, introduced to bring zero tax-paying profitable companies into the net, should not exceed 50 per cent of the basic corporate tax rate.
Trehan, who was upset when Budget 2011-12 had imposed service tax on hospitals and diagnostic centres, said this tax should not be restored, even if the GST came into effect. Ridiculed as ‘misery tax’, this tax proposal was later withdrawn.
