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Finance Minister Arun Jaitley on Wednesday stressed that the Centre would expand public spending even in 2016-17 despite the additional financial implications, including the implementation of the One Rank, One Pension and Seventh Pay Commission report.
He urged India Inc to step up private investments, especially in the infrastructure sector. Addressing a pre-Budget meeting with captains of trade and industry, the Minister said the economy has achieved a robust growth rate despite volatility and uncertainty in the global economy and expressed the hope that growth prospects for the next fiscal year would be better.
A roadmap for reduction of the corporate tax rate and elimination of exemptions, early implementation of GST and ease of doing business were some of the key demands put forward by India Inc at the meeting.
In Budget 2015-16, Jaitley had proposed reducing the corporate tax rate to 25 per cent from 30 per cent over a four-year period, along with a phase out of exemptions to India Inc.
Industry chambers, including CII and FICCI, proposed that the incentives should be withdrawn in tandem with the reduction in the corporate tax rate.
“We have sought a clear roadmap on the 25 per cent corporate tax. We support removal of incentives and allowances,” said Sumit Mazumder, CII President, after the one-and-a-half our meeting.
FICCI President Harshavardhan Neotia also said the chamber has called for reduction in the Minimum Alternate Tax rate once all the incentives and allowances are reduced. Industry chambers also pitched for early rollout of the GST and said they would support government efforts for the implementation of the indirect tax reform.
Meanwhile, ahead of the launch of Start-Up India on January 16, Assocham called for tax breaks for start-up hubs in each city on the lines of those given to IT parks. “This will promote entrepreneurship in smaller towns, especially those which are not around information technology,” said Sunil Kanoria, President, Assocham. Similarly, Nasscom President R Chandrashekhar called for the mitigation of tax liabilities, particularly taxes which are taken up front for start-up firms. “The discussions were on issues related to start-ups, e-commerce and Internet and mobile companies,” he said.
The Federation of Indian Exporters also called for service tax exemption for exports and correction of anomalies in the inverted duty structure.
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