IANS, June 07, 2014
The finance minister, who kicked off his pre-budget meetings Thursday, has already met representatives of the agriculture sector and civil society for their views and suggestions on various policy formulations. State finance ministers, who hold the key to implementing two crucial economic reforms measures — the pan-India goods and service tax and the direct tax code — and members of industry chambers are next on the list for such deliberations. The meetings with state finance ministers is scheduled for Monday.
During his meeting with trade unions, Jaitley said “skill development would be given priority so that more and more trained workers join the Indian economy.”He said the government will give due consideration to the 10-Point Joint Charter of Demands given by the central trade unions while formulating the budgetary proposals, accordingly an official statement released after the meeting.
Trade unions gave a joint memorandum to the finance minister. One of the demands include linking minimum wage to Consumer Price Index (CPI) and fixing it for industrial workers at not less than Rs.15,000 a month. Later in a separate meeting, industry representatives pushed for rationalisation of tax structure and revival of economic growth.
Advocating the need to remove retrospective tax amendment, president of Confederation of Indian Industry (CII) Ajay Shriram said: “At a time when the Indian economy is struggling to regain its growth momentum and investment sentiment is weak, frequent and retrospective changes in tax laws, which are ambiguous and open to wide interpretation, should be avoided to restore investor confidence.”
Shriram stressed on the need for exploring non-tax revenue option for augmenting revenue while rationalising non-productive expenditure to contain the fiscal deficit. “Revenue generation is dependent on the economic activity in the country; revenues cannot be enhanced by prescribing artificially high targets for the tax officers,” said Sidharth Birla, president, Federation of Indian Chambers of Commerce and Industry (FICCI), while addressing the need for easing tax norms.
Birla said the government should make earnest efforts to move away from the aggressive revenue approach and provide a genuine non-adversarial and conducive tax environment. “A major setback to the investment climate in India in the recent times has been the slew of retrospective amendments carried out in the tax laws as a part of the Finance Act, 2012,” Birla said.
Secretary general of CUTS International Pradeep Mehta suggested introduction of competition and transparency reforms to contain inflation and achieve high growth. In its memo given to the finance minister, CUTS International highlighted four critical areas of competition, public procurement, financial consumer protection and fiscal management.
“Introducing reforms in these areas would assist in containing inflation and achieving optimal growth, while protecting the needs of vulnerable consumers, and bringing transparency and accountability in economic governance,” it said.
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