Federation of Indian Chambers of Commerce and Industry charted a roadmap for 8-10 per cent economic growth and asked the government to bring in sweeping tax reforms, including cut in corporate tax rate to 30 per cent, remodelling income tax slabs, lifting of surcharge and education cess.
A nine-member Ficci delegation, led by its preident Y K Modi, met revenue secretary K M Chandrashekhar and submitted a comprehensive note for a range of measures to tone up the tax system required to raise industry and services sectors' growth rates to over 11 per cent and push up agricultural growth to four per cent.
This in turn would accelerate GDP growth to over 8 per cent and move the economy towards 10 per cent growth path, a Ficci release said.
Ficci sought scrapping of dividend distribution tax and minimum alternate tax and increasing foreign direct investment limit for insurance and telecom sectors to 49 per cent and 74 per cent respectively to realise India's manufacturing potential.
Ficci told the revenue secretary to realign tax rates to the levels of the member countries of the Association of South-East Asian Nations. "The tax rate for domestic companies should be brought down to 30 per cent" and ultimately to 25 per cent in the coming years.
At present, corporate tax rate in India is at 35 per cent. Adding the 2.5 per cent surcharge and 2 per cent education cess, the tax rate work out to 36.6 per cent for Indian companies and 41.8 per cent for multi-national companies.
On income tax, FICCI favoured remodelling tax rates for various income slabs by exempting all individuals whose income was Rs 100,000 while charging a maximum rate of 30 per cent for incomes above Rs 10 lakh (Rs 1 million).