Top corporate leaders and representatives of all the major industry associations, including FICCI, CII and Assocham, on Tuesday urged finance minister Pranab Mukherjee to continue the stimulus measures for at least six more months, even as there are clear signs of economic recovery.
The finance minister's pre-budget meeting with corporate honchos - including FICCI president Harshpati Singhania, Videocon's V N Dhoot, Mahindra & Mahindra's Anand Mahindra, Tulsi Tanti of Suzlon, Ashwin Dani of Asian Paints and Swati Piramal of Assocham - saw unanimity on the demand that tax concessions announced by the government last year should continue for now.
After the meeting, Singhania told reporters that the industry urged Mukherjee to bring down the minimum alternate tax (MAT) from 15 per cent to 10 per cent, as the effective rate for a MAT paying company and a regular tax paying company is about the same because of lower deduction for depreciation on book profits, etc.
This is a long-standing demand of industry. Singhania said MAT is no longer the minimum alternate tax, adding that when a company is amalgamated or demerged, credit benefit of MAT should be available to the amalgamated company.
Assocham president Swati Piramal added, ''We have all together requested the finance minister to continue with the fiscal stimulus package. It should not be suddenly withdrawn but should be gradually phased out as the industry is just coming out of the recession and inflation rate has already increased significantly during December 2009."
The industry leaders also impressed upon Mukherjee the need to empower the middle class by giving them more tax sops on personal income tax. It was suggested that the tax rate of 30.9 per cent, inclusive of 3 per cent education cess, on an income of Rs5 lakh and above be reduced to 30 per cent.