India Inc today pressed for reduction in corporate tax, raising of personal income tax exemption limit and steps to mitigate the impact of demonetisation on the economy.
Finance Minister Arun Jaitley, who heard the industry in his customary pre-budget meeting, asked them to step up investment.
They suggested that the income tax exemption limit be raised to Rs 5 lakh and interest rate be reduced to give a boost to the manufacturing sector.
The industry said that lower corporate tax and withdrawal of tax incentive would result in higher collections and also make India an attractive investment destination.
The other suggestions include elimination of Minimum Alternate Tax (MAT) and increase in public investment in infrastructure and social sectors.
Talking to reporters after the meeting, industrialist Rajan Mittal said, "Demonetisation issue was discussed in the meeting. We need to make sure that the inconvenience that some of the people are facing must get better and I am sure they (government) are working on it.
"I think the government understands (the situation) and they well recognise that in short term there will be some pain ... What more can be done to enhance consumption, production and investment. Those discussions have taken place".
Finance Ministry in a statement said that the industry demanded that after demonetisation, since banks will have lot of funds, therefore, interest rate should be reduced for manufacturing and other sectors especially for micro, small and medium enterprises.
Industry also suggested that the government accelerate PSU disinvestment, reduce corporate tax to 18 per cent including all surcharges and cess, and cut in minimum alternate tax.
These issues among others were raised during the pre- Budget meeting between Finance Minister Arun Jaitley, industry chambers and exporters.
"Jaitley asked the representatives of Business and Trade Sector to increase the private sector spending especially in infrastructure sector," the ministry statement said.
The Government has taken many steps to improve governance by bringing in transparency and efficiency through systematic changes, Jaitley added.
Exporters body FIEO President S C Ralhan suggested creation of export development fund to boost shipments.
Sharing similar view on demonetisation, Ficci President Harshvardhan Neotia said demonetisation will have a short term impact on the economy.
CII said that while the demonetisation is right and welcome move for the long term, "it is widely felt among industry members that we need to offset the immediate downturn that industry will go through".
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