The Narendra Modi Government is likely to walk the extra mile to spur investments in the economy and provide a conducive tax environment for both domestic and foreign investors. Yet, the upcoming Budget may not be “too populist” or provide too many giveaways in the form of fiscal sops to corporate India.
This was the sense the captains of industry got from their nearly two-and-a-half-hour meeting with Finance Minister Arun Jaitley here on Friday.
In a pre-Budget interaction with industry, Jaitley is said to have conveyed that the first two years of the new Government will focus on consolidation of economy and revenues.
On its part, India Inc used the occasion to make a case for the Government to move away from an “aggressive revenue approach” and provide a genuine non-adversarial and conducive tax environment.
Corporate India poured out its woes over the complex tax administration system and urged the Finance Minister to withdraw retrospective amendments (in income tax law) that had had an adverse impact on the investment sentiment.
While they sought early implementation of the Goods and Services Tax (GST), the general message conveyed on the Direct Taxes Code Bill was that the last version put out by the UPA Government should be avoided.
“Our submission was that the Government should consider re-writing the DTC Bill in totality and not go with the current one,” Ajay Shriram, President, Confederation of Indian Industry (CII), said after the meeting.
Chambers’ plea The CII also pitched for postponing the General Anti-Avoidance Rules (GAAR) by three years. “Foreign investors still have lot of anxiety over GAAR,” Shriram said. The President of the Federation of Indian Chambers of Commerce and Industry, Sidharth Birla, said he had suggested that the Government weigh the options of either looking at the DTC Bill afresh or continue with the current income tax law with amendments.
He also pitched for reduction of the threshold limit for investment allowance to ₹25 crore from ₹100 crore now, while extending its availability for more years.
Assocham President Rana Kapoor called for special focus on sectors with high growth and job multipliers such as housing, tourism, healthcare and construction.
He urged the Government to go in for SUUTI stake sale in blue-chip companies, stating that it could offer a route to raise critical resources for the exchequer and aid fiscal consolidation.
Rafeeque Ahmed, FIEO President, said the Finance Minister gave the impression that he will give priority to exports, employment creation and, if needed, even look at some tax concessions to meet these objectives.
Industry wishlist Tulsi Tanti, Chairman of Suzlon, said he had made a case for accelerated depreciation on wind mills.
Sunil Bharti Mittal, Chairman of Bharti Enterprises, urged the Finance Minister to support infrastructure development in the country and go in more auctioning of spectrum in the coming days. Kiran Mazumdar-Shaw, Chairman and Managing Director of Biocon, said the meeting discussed various issues such as direct taxes, manufacturing, innovation, job creation, entrepreneurship. The new Government is committed to kick-starting the economy, she said.