Captains of Indian industry have urged the government to continue the stimulus package till the middle of the next financial year (2010-11) to help the economy achieve robust growth.
In a pre-Budget meeting with Finance Minister Pranab Mukherjee today, the industry leaders stressed the need to bring down various taxes and keep the interest rates low.
“We told the finance minister that we need to continue the stimulus in the first two quarters of the next financial year. Much more investment is needed into the economy,” Harsh Pati Singhania, president of the Federation of Indian Chambers of Commerce and Industry (Ficci), told reporters after a delegation of industrialists met Mukherjee.
The industry chambers have expressed their concerns on some areas of the draft direct taxes code, such as the minimum alternate tax (MAT) and the dividend distribution tax (DDT). After meeting the industry leaders, Mukherjee gave a presentation on the direct taxes code to Prime Minister Manmohan Singh at the latter’s office.
The rate of MAT was raised to 15 per cent in the 2009-10 Budget. The industry wanted it to be lowered to at least 10 per cent in the forthcoming Budget. It also said that the cascading impact of DDT should be totally removed. In the financial year 2008-09, the Budget allowed the deduction benefit to one level.
Confederation of Indian Industry (CII) President Venu Srinivasan said the focus of the coming Budget should be to restore the growth to 9 per cent. He told the finance minister that the industrial turnaround was at an early stage and investments had not picked up yet.
“Looking at the pressure on the fiscal side in terms of the widening deficit, the finance minister could consider an exit from the stimulus package provided it was gradual, calibrated and the end point of the exit coincided with the date of introduction of the goods and services tax,” Srinivasan added.
Ficci said it was important to continue tax holiday benefits for undertakings engaged in infrastructure and core sectors as also those in exports. CII said disinvestments of up to Rs 40,000 crore could be targeted by the government and the amount be spent on capital creation.
Assocham President Swati Piramal pressed for an immediate integration of excise and service tax into the central GST from April 2010. She also demanded that corporate tax be reduced to 25 per cent and income tax be cut to 20 per cent for small and medium enterprises.
