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Posted on Dec 17, 07:52AM | IANS
The government should not make any change in the indirect tax rates till the implementation of the proposed goods and services tax (GST) regime, the Confederation of Indian Industry (CII) has said.
In its pre-budget memorandum to the finance ministry, the industry body requested the government to bring "more clarity, transparency and certainty in implementation of tax provisions and re-engineer tax administration by simplifying the procedures and reducing the compliance cost".
"The budget should aim at facilitating convergence to the long-term objective of having a simplified and rational taxation system," CII said.
On indirect taxes, CII recommended status quo at the current rates for excise, customs duty and service tax, in order to maintain stability in taxation.
"The rates may be re-aligned at the time of GST implementation," it said.
CII has suggested a four point agenda to re-energise growth in the Indian economy.
It has stressed on the need for kick-starting the investment cycle by fast-tracking decisions for approval of projects by putting in place necessary policy measures to clear 50 large projects in consultation with state governments and relevant ministries within a pre-decided time frame.
On fiscal consolidation, CII suggested measures for augmenting revenue and curtailing non-priority expenditure. It suggested raising Rs.50,000 crore through disinvestment, monetising surplus land available with the government, utilising free cash flows of public sector undertakings (pegged at Rs.41,500 crore) and unlocking the assets locked up in chronically sick PSUs to augment revenue stream.
On measures related to expenditure control, CII stressed on the need to curtail non-priority expenditure by rationalising subsides by gradually removing the subsidy on diesel, targetting a 10 percent saving by using limited quantitative restriction on purchase of subsided fertiliser and consolidation of overlapping parts of central schemes.
To provide a fillip to the fragile export sector, CII recommended the extension of interest subvention scheme to all sectors including automotive, pharmaceuticals and engineering.