RTTNews - India should have an investment budget to recover from the economic slowdown, said the Confederation of Indian Industry's (CII) in its pre-budget recommendations presented to the finance ministry.
The CII President, Venu Srinivasan said that as public consumption and investment dipped, the budget is required to be an investment budget to bring back the economy to over 8% growth in the coming year. He also stressed the need for fiscal prudence, capacity creation and promotion in investment.
CII also reiterated the need for vesting due attention on innovative investments in physical and social infrastructure that would boost internal growth and result in gross capital formation in infrastructure touching 11% of the GDP by 2011-12. It also suggested formation of an infrastructure monitoring and implementation agency to raise efficiency in expenditure.
The industry body recommended simplification of tax structure and the abolition of surcharges, cess, FBT and MAT, while also suggesting that investment allowance be re-introduced to boost front-loading of investments. It also called for easing individual tax exemption limits by a further Rs.50,000 and removing retirement fund limits. Further it suggested a limit allowed under section 80C is raised to Rs.2-lakh, provided the additional Rs.1 lakh savings is in infrastructure bonds.
The CII said budget should continue with the focus on education and skill development giving importance to National Skill Development Corporation to encourage youth initiatives.
It suggested that additional public funds for the initiatives could be brought in through divestment in select PSUs, mobilizing foreign exchange by issue of sovereign-backed bonds and widen tax base. It called for tapping black money in the economy as well as overseas.
Regarding indirect taxes, the industry body stressed on the implementation of Goods and Services tax as per schedule from April 1, 2010. It also recommended for a single unified rate of 12% that would lead to a unified single market and suggested reductions of GST and CST rates to 1%.
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