Steps to enhance consumption and productivity after the government’s move to withdraw high-denomination currency notes along with reduction in corporate income tax were some of the suggestions made by India Inc in its pre-budget meeting with finance minister Arun Jaitley on Saturday. The finance minister on his part nudged the industry to increase private sector investment, especially in infrastructure.
Industry representatives in their meeting with finance ministry officials suggested that the government should accelerate PSU disinvestment, reduce corporate tax to 18 per cent, including all surcharges and cess and cut minimum alternate tax.
“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…what more can be done to enhance consumption, production and investment. Those discussions have taken place,” industrialist Rajan Mittal told reporters after the meeting.
CII said that though demonetisation is right and a welcome move for the long term, but “it is widely felt among industry members that we need to offset the immediate downturn that industry will go through”.
It suggested that to revive investments, the government should undertake divestment/privatisation of 100 companies, including the 74 identified by NITI Aayog, by December 31, 2017. FICCI President Harshvardhan Neotia also said that currency withdrawal will have a short-term impact on the economy.
In their suggestions for the upcoming Budget, FICCI recommended increase in personal income tax slab and reduction in MAT. Exporters body FIEO President S C Ralhan suggested creation of export development fund to boost shipments.
Assocham said the demonetisation move now needs to be followed up with stronger reforms on the taxation side.
Other suggestions included tax concessions to both individual taxpayers and corporate sector along with an increase in minimum exemption limit for Personal Income Tax to Rs 5 lakh. Also, it was suggested that interest rates be reduced for manufacturing and other sectors especially for micro, small and medium enterprises.
Earlier, the finance minister also held pre-budget meeting with representatives of social sector, wherein he emphasised that inclusive growth is high on government’s priority and that the allocation of resources to the social sector is increasing. The government wants to make an extensive social welfare system with focus on better education system .., he said.