(LiveMint)
Economists on Monday urged finance minister Arun Jaitley to cut the corporate tax rate to make Indian industry globally competitive, and give incentives to infrastructure and small businesses without compromising on the government’s fiscal consolidation road map. The recommendations made by the economists who met the minister for a pre-budget consultation included tax proposals, social security measures and ways of mobilizing additional revenue.
According to a finance ministry statement, the economists suggested that in case the government falls short of achieving its fiscal goals for the current fiscal year (including a 3.2% fiscal deficit target), the reasons should be explained in the budget. They wanted the forthcoming budget to set out a road map for further tax reforms.
The finance ministry recently set up a task force to draw up a new direct tax code, taking into account global best practices and the economic needs of the country. 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.
