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To control inflation, the Government should abolish Special Additional duty on all imports. The duty loss would be lower as it is Modvattable. The other way is by disinvestment of PSUs. Infrastructure projects like airports, have been privatised. The Railways too is thinking on these lines, which will propel growth levels to 10 per cent and ease pressure on Government coffers. This will also help in reducing fiscal deficit and achieving targets in the Fiscal Regulatory Budget Management Act. The Government should take efforts for another Green Revolution as we are still an agrarian economy. On taxation, service tax should be increased from 12 per cent to 14 per cent and thereafter to central rate of 15 per cent. Excise duty has to be decreased to 15 per cent. CST should be reduced from 4 per cent to 2 per cent and efforts for inter state VAT set-off should be made. All these steps will lead to implementation of GST by 2010. On the direct taxation front, FBT should be scrapped. Similar is the case of surcharge, which needs to be revoked. Status quo should be maintained on the capital gains tax. Ways for taxing agricultural income should be considered.

P. Prasanth, Manager - Finance, GMR Group

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