India Inc on Wednesday pressed for a clear roadmap for reduction in corporate tax rate from 30 per cent to 25 per cent in the forthcoming Budget even as Finance Minister Arun Jaitley stressed that improved fundamentals would lead to better economic growth in 2016-17.
The industry chambers in a pre-budget consultation meeting with Finance Minister Arun Jaitley also made a case for the continuation of public expenditure to boost growth.
Jaitley endorsed the idea that the business and trade sector needed to "increase spending specially in the infrastructure sector".
Industry bodies such as CII and Ficci suggested that the withdrawal of incentives should be in tandem with the reduction in corporate tax rate besides removal or reduction of minimum alternate tax (MAT).
"As far as taxation is concerned, we have asked for a clear roadmap on the 25 per cent (corporate tax)… We are totally in support of removal of incentives and allowances," CII President Sumit Mazumder said after the meeting.
The chambers also suggested raising income tax exemption limit to Rs 5 lakh and a levy of nominal rate of interest on delayed payments.
Jaitley said the Indian economy has achieved robust growth rate despite global volatility and uncertainty, mainly because of steps taken by the government.
"The current level of growth rate of our economy and sound fiscal fundamentals present better growth prospects for the next Financial Year 2016-17 as well," he said.
The industry further demanded that MAT be withdrawn in a calibrated manner and tax exemptions and allowances be reduced while tax rate may be rationalised.
The industry bodies also asked for tax incentives for use of debit and credit card and suggested that payment of utilities should be made mandatory by cheques or through e-payment.
They further pushed for measures to revive private sector investment, especially in the infrastructure sector.