The Prime Minister's Economic Advisory Council on Wednesday favoured more income tax sops as also a revision in indirect tax rates on consumer durables in Budget 2008-09 to fire up the economy.
"Some adjustments in income tax slabs and so forth (could be made), but not any substantial reduction in tax rates," Council Chairman C Rangarajan told reporters after a pre-budget meeting with Finance Minister P Chidambaram in New Delhi.
He was replying to a query if the council favoured more income tax exemptions.
Rangarajan said the council's view was that income tax rates could be retained at the present level, but slabs could be readjusted somewhat.
Expressing concern over the slowdown in manufacturing sector that could restrict economic growth to 8.5 per cent in FY'09, he said: ". . . there are some areas of concern where there are weaknesses."
The Indian economy had grown by 9.4 per cent in 2006-07, and is expected to clock close to nine per cent growth this fiscal.
To spur growth, the council suggested increasing public investment and exploring the possibility of some adjustments in indirect taxes.
When asked whether the council wanted reduction in excise duties on consumer durable goods, Rangarajan said: "Something of that sort."
On oil sector, he said already the committee headed by him has recommended changing excise duty structure on crude to specific duties from the present ad-valorem.
"That point was also made (at the meeting)," he said.
On the rupee appreciation, Rangarajan said the issue was already discussed in a recent report of the council.
The report had suggested three measures for dealing with the issue -- allowing the rupee to appreciate a bit, making sterilised intervention and taking some steps to moderate capital flows.
Growth in the manufacturing sector, which the EAC described as an area of weakness, dipped to 5.4 per cent in November, 2007 from 17.2 per cent in the same month in 2006.
The overall industrial production plunged to 5.3 per cent from 15.8 per cent during the period.
For the first eight months of this fiscal, manufacturing growth stood at 9.8 per cent, down from 11.8 per cent during the same period last fiscal.
Industrial production, on the other hand, slid to 9.2 per cent from 10.9 per cent during the period.