Top on the list of priorities by India Inc is the demand to spur investment by cutting the MAT rate especially to boost manufacturing and to give a fillip to infrastructure projects.
As Finance Minister Arun Jaitley gets ready to give the final touch to Budget 2015, industry is hoping for bolder reform action to revive growth. Top on the list of priorities is the demand to spur investment by cutting the MAT rate especially to boost manufacturing and to give a fillip to infrastructure projects. India Inc also wants the government to loosen its purse strings and up spending on big ticket infra projects.
To boost consumption business leaders want the finance minister to hike income tax exemptions and introduce new investment schemes especially for gold as the underlying asset.
To raise revenues, industry has called for an even more aggressive divestment program and the sale of loss making public sector units, a further deferral of General Anti-Avoidance Rule (GAAR) and a reiteration of the government’s commitment to stop terrorism is also on the wish list along with the usual call for cutting wasteful expenditure.
In a panel discussion on CNBC-TV18, members of Confederation of India Industry (CII) talk about what India Inc wants from the Budget. The panel includes CII President, Ajay Shriram, Chandrajit Banerjee, Director General, CII , Naresh Trehan, Chairman, National committee on Healthcare, CII and CMD, Medanta-The Medicity and Sumant Sinha, Co-Chairman, National Committee on Renewable Energy, CII and the Chairman and CEO of ReNew Power Ventures Pvt. Ltd.
Below is verbatim transcript of the discussion
Q: Corporate tax rate for domestic companies to be reduced to 25 percent, MAT levy to be moderated to 10 percent, Dividend Distribution Tax (DDT) rate to be reduced to 10 percent; surcharge may be removed for all tax payers. You want a dream Budget, is this really possible given the fiscal constraints?
Shriram: The way we look at it is, what we think is good for the economy and for economic growth in India. We have talked about giving incentives or making it easier for investments to happen so that it becomes viable.
So, one side is the investment as you rightly said these 4-5 areas but on the other hand one must move towards increasing consumption and savings and for that we have recommended instead of Rs 2.5 lakh for income tax, please raise that; please give other benefits to individuals who can have savings or have money for investment.
Q: Year after year we have discussed the possibility of MAT being done away with or at least the MAT rate being reduced. This time around, do you believe that on MAT this year we could finally see some relief? It is part of your recommendations.
Shriram: In 2007 when MAT was implemented, it was 7.5 percent. By last year it has come to 18.5 percent and this is in the overall package of the governments’ aggressive push for the ‘Make in India’ campaign.
Ultimately, to make in India and to get manufacturing to 25 percent of GDP from about 15 percent of GDP, we have to do something different. There is s phrase which makes a lot of sense. If you always do what you always did, you will always get what you always got. So, we have to make a change.