New Delhi: The pre-budget consultation meetings were held on Monday between economists and Union Finance Ministry.
The economists made few recommendations which would make Indian industry globally competitive and gives boost to the infrastructure and small businesses without compromising the fiscal consolidation road map of the government.
The recommendations include tax proposals, social security measures and ways of mobilizing additional revenue.
The economists also requested that if the government falls short of achieving its fiscal goals for current fiscal year, the reasons should be explained in the budget.
To boost the economy, the government has set up a task force to draw a new direct tax code. In addition, the government is in the process of phasing out corporate tax exemptions and reducing the tax rate to make the tax system simple and reduce litigation. In the current fiscal year, the corporate tax was reduced from 30% to 25% for the companies with annual revenue less than Rs 50 crore a year.
The finance ministry also indicated that once revenue collections stabilize, the 12% and 18% slabs will be merged. The economists also stressed about more remunerative prices to farm produce and higher old age pension.
One of the ways to mobilize additional revenue was suggested to levy long-term capital gains tax on equity and disinvestment of state-run companies.