FICCI President lauds big steps in social sector; expresses disappointment over tax proposals for corporate India
Mr. Habil Khorakiwala, President, FICCI complimented the Finance Minister on the major steps he has proposed in the social sector. However, Mr. Khorakiwala felt that an opportunity of reaching a two-digit growth trajectory has been missed in view of the tax proposals.
Mr. Khorakiwala referred to the four major steps announced by the Finance Minister, namely, massive step up in outlay on education (34.2%), health (21.9 %), school education (35%) and curtailing the drop out rates through scholarships (1 lakh).
He welcomed the emphasis on agriculture and rural development to launch a second green revolution; focus on infrastructure building and introduction of new infrastructure financing schemes, and human resource development through secondary, higher and vocational training throughout the country, and hoped that these would help in sustaining the current growth rate in the long run.
FICCI also welcomed the Finance Minister's announcement to extend the existing in-house R&D benefit by another five years. The Finance Minister has provided income tax surcharge exemption to firms and companies with taxable income up to Rs 1 crore; raised the excise duty exemption limit for Small Scale Industry from Rs. 1 crore to Rs 1.5 crore, biodiesel and food mixes.
However, the FICCI President pointed out that the corporate sector expected a lowering of the tax rates in view of the buoyancy in reveneue collections. On the contrary effective tax incidence would be going up by more than 1% as a result of the new tax proposals, he felt.