NEW DELHI: India's budget 2009-10 should be an "investment budget" to help the the country tide over the economic slowdown, said the Confederation of Indian Industry's (CII) pre-budget recommendations, presented to the finance ministry on Monday.
"There has been a steep decline in the public consumption and investment, so this budget has to be an investment budget," CII president Venu Srinivasan told reporters here after releasing the industry lobby's key recommendations.
"The government must increase the investment in infrastructure, which is much lower than China. Also the cost of doing business in India is higher by 15 percent as compared to China that effects the competitiveness," Srinivasan told reporters.
The key direct tax recommendations in the CII memorandum include increasing depreciation rates for plant and machinery from 15 percent to 25 percent, and introducing an investment allowance package for businesses for cost savings.
For individuals, CII has recommended to increase the threshold limit of tax exemption by Rs.50,000, which would have positive impact on savings and consumption.
On indirect taxes front, the memorandum stressed that Goods and Services Tax (GST) should be implemented on April 1, 2010, adding that a single unified rate of 12 percent would spur creation of a unified single market.
CII further suggested that the fringe benefit tax be abolished or be allowed as a credit against income tax and Central Sales Tax rate be brought down to one percent.
The lobby also recommended to reduce customs duty from 5 percent to zero on non-coking coal, petroleum coke and scrap of copper, zinc and lead, and slash it from 5 percent to 2 percent on naphtha and liquefied propane.
The CII memorandum also calls for the continuation of 8 percent excise duty in general and reduction of excise duty from 16 percent to 8 percent on medicines covered under the Medical and Toilet Preparation (M&TP) Act.
Service tax payment in case of comprehensive annual maintenance contracts should be simplified by charging on a specified percentage value of the contract, it added.
Source : The Economic Times