The Hindu Business Line : Tax rates can be reduced further: Chidambaram

Hyderabad, July 31 There should be no hesitation to reduce the tax rates further in view of the widening of tax base and better compliance, according to the Union Finance Minister, Mr P. Chidambaram.

In his Tenth Convocation address at the University of Hyderabad here on Tuesday, he said: “In a rapidly growing economy, we ought to be prepared to act on the premise that revenues would nevertheless be even more buoyant (in case of reduction of tax rates).”

There must be a basic tax structure which is broad based and oriented to low tax rates. To promote greater synergies between the State and Centre in tax structures, preparations are in full swing to introduce a Goods and Service Tax (GST) from April 1, 2010, he said.

Stating that the GDP has grown “impressively” at an average rate of 8.6 per cent for the last four years ended March 2007, Mr Chidambaram said there should be special focus on sectors which would give exceptional growth rates.

“Some promising sectors in this regard are food processing, electronic hardware, leather products, hotels and tourism,” he said.

WEF ranking

Referring to recent ‘competitiveness’ ranking by the World Economic Forum (WEF), the Union Minster said while the forum had commended some aspects of the country in competitiveness by ranking India as 43rd country out 120 nations, there are weaknesses in the spread of educational opportunities and poor quality infrastructure.

There is also a need to focus on specialised education to ensure a sufficient supply of professionally skilled graduates, he added.

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