Ficci faults increase in indirect taxes as wrong signal to corporates


NEW DELHI: The president of Ficci, H Khorakiwala, I congratulated the finance minister’s “terrific budget” on the social sector front, but said he has lost an opportunity due to the indirect taxes imposed, which has given a wrong signal to the corporate world.

He specially lauded increased spendings on health, education and agriculture, and also the GDP spending that has been raised.

He said however that the corporate sector is not happy with the indirect and direct tax burdens, especially various instances of multiple taxation, and it would have been better had he taken measures to ensure keeping the growth rate at 9.2 per cent.

Responding to a question, he refused to term this as an anti-growth budget, stressing that not that there will be no growth, but it would have been better had he taken this opportunity.

He also said that the inclusive economic development is sustainable in the long term.

There will be somewhat retardation in the IT sector due to the taxes imposed and this is a disappointment for the sector.

Ficci Secretary General Dr Amit Mitra further clarified the body's stand, saying that it is not as if the 9 per cent growth rate will slow down, because that has happened due to the private sector and corporates, as well as public participation, but the industry had expected something in the budget that would perhaps push the growth rate beyond what is there now, to 10 per cent.

"That is an opportunity that the finance minister has missed and this is disappointing," he said.

Specifically on the IT sector, Mitra held the imposition of MAT is "too premature. The government could have done this when the IT industry would turn more mature, when we started dealing with imbedded technologies, rather than the preliminary technology we are dealing with now.

He also said that the tax on stock options for employees is also a deterrent for the industry.

"The government could have lowered taxes and asked for better collection and that would have helped industry, since the minister admitted that tax collection has increased. Instead, he imposed taxes, which is not the right thing.

However, he said that the reduction of the fiscal deficit, "for the first time in 25 years, will help curb inflation, added with the benefits that the farm sector has been given, which lies at the core of inflation.

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