With the finance minister deciding against holding pre-Budget meetings this year, this series tries to find out what leading businessmen, economists and politicians wanted to tell the minister, but couldn't do so:
R K Somany, president, ASSOCHAM'
"If we are targeting a growt rate of 7-8 per cent, our tax reforms process should include measures to facilitate economic growth such as a moderate tax rate on a large base, reduce fiscal deficit, contain inflation, increase investment in infrastructure development, reduce cost of capital and transaction costs.
"The tax exemption limit should be raised to Rs 100,000. For income Rs 100,000- 200,000, the tax rate should be 10 per cent, for income over Rs 200,000-500,000, the rate should be 20 per cent, while for income exceeding Rs 500,000, it should be 30 per cent.
"These rates will provide adequate purchasing power and perk up consumer demand. There should be moderate tax rates by reducing excise duty on manufactured goods and discontinuing special excise duty on several products.
"There has to be an increase in public expenditure for infrastructure development , which generates demand for industrial goods and employment to a large number of people.
"Tax exemptions granted to dedicated export units located in EPZs, SEZs and EoUs should continue up to 2010."
Sector-wise/Depreciation
Kelkar says:
- Reduce rate of depreciation allowed under the Income Tax Act to the level permitted under the Companies Act.
- Reduce general rate of depreciation for plant and machinery to 15 per cent from 25 per cent, and
- Merge unabsorbed depreciation with unabsorbed business loss and allow it to be carried forward indefinitely.
CII says:
- Retain present system of depreciation differential between the I-T Act and the Companies Act.
- Merge unabsorbed depreciation with unabsorbed business loss and allow it to be carried forward indefinitely, and withdraw restriction on carry-forward of unabsorbed depreciation beyond eight years for the period between April 1997 and March 2001, and
- Include goodwill within the definition of intangible assets to be eligible for depreciation allowance.
ASSOCHAM says:
- Limit depreciation to Rs 5,000 in case of small assets.
- Allow depreciation on assets acquired and ready to use.
- Remove condition of expansion of over 25 per cent capacity addition to claim 15 per cent additional depreciation, and
- Do not consider additional depreciation to arrive at the written down value to ensure additional incentive.
