PC For Higher Tax On Luxury Products.

Home minister P Chidambaram has argued for higher taxes on luxury products and has backed imposing inheritance tax to raise resources, while expressing concern over the low tax-GDP ratio, according to the minutes of the Planning Commission meeting chaired by Prime Minister Manmohan Singh last month.

"We are really underestimating our capacity to raise resources, especially tax resources. Since non-plan expenditure is difficult to contain, the tax-GDP ratio must be raised, especially by taxing conspicuous consumption and imposing inheritance tax," he said at the meeting.

Chidambaram also underlined the need to streamline the manufacturing sector to generate more employment. Planning Commission has proposed raising the tax-GDP ratio from the projected 7.7% in the 11th Plan (2007-12) to 8% in the 12th Plan (2012-17).

Chidambaram also emphasized the need for improving management of public sector undertakings and made a case for providing security of tenure to managers and officials in ministries handling energy and infrastructure sector. During the meeting, the plan panel proposed to raise average economic growth of 9% to 9.5% during the 12th Plan period from the expected 8.2% in the current five-year plan.

Source : timesofindia.indiatimes.com