A cut in corporate tax rate to 18-25 per cent, simpler personal income tax slabs and an across the board quarterly returns filing for the goods and services tax (GST) were the key suggestions put across by various trade and industry groups in their pre-Budget consultation with finance minister Arun Jaitley on Wednesday. Jaitley asked business leaders to invest in infrastructure sector, saying that private investment along with public and foreign investment is the key to boost growth and create job opportunities, a finance ministry release quoted him as saying.
The industry groups also suggested allowing purchase of banks’ recapitalisation bonds by institutes and the public, reducing government stake in Public Sector Banks, allowing banks to securitise their loans and sell the same, setting-up of Land Bank Corporation for monetisation of government land including the land belonging to Army, Railways and public authorities, the finance ministry said.
Other suggestions included setting-up of National Power Distribution Company and creation of National Innovation Fund with initial corpus of Rs 10,000 crore to promote innovation and out of box ideas along with setting-up of empowered group of state agricultural ministers to implement agricultural reforms, it said.
Federation of Indian Chambers of Commerce and Industry (FICCI) suggested an across the board cut in tax rate for businesses and individuals, especially in backdrop of US tax reform.
“There is a need to consider across the board tax rate cuts for businesses and individuals in India to spur domestic investment and demand, and to retain India’s overall competitive environment globally. In fact, many key global economies are opting for significant rate cuts, for instance, the US is on the verge of historic tax reform that proposes to cut the corporate tax rate from a top rate of 35 per cent to 20 per cent as well as provide relief to individuals….it is expected that this reform proposal would spur economic growth and increase overall tax collections. A similar approach should be followed by India,” FICCI President Pankaj Patel suggested in the meeting.
Confederation of Indian Industry (CII) suggested a cut in corporate tax rate to 18 per cent at the earliest with withdrawal of tax incentives and exemptions and surcharges and cesses. CII also suggested the government to consider levying three rates, with one rate for ‘standard’ or items of mass consumption in the range of the convergence of 12 per cent and 18 per cent; ‘merit’ goods including items used by the poor to be shifted to 5 per cent or the nil slab and the highest tax rate for ‘demerit’ goods at 28 per cent along with bringing in petroleum, alcohol and real estate in its ambit.
“In terms of the taxation requirement, if we see corporate taxes across the world, the trend is that people are reducing corporate taxes. India is among the highest…” CII President Shobana Kamineni said.