Ahead of a pre-Budget discussion with finance minister P Chidambaram, India Inc on Wednesday hit out at the proposal to tax higher income groups at differential rates.
At a meeting with Prime Minister’s Economic Advisory Council chairman C Rangarajan, industry chambers opposed a plan to levy an inheritance tax or taxing the super rich at a higher rate, saying that it would be counterproductive
Adi Godrej, president, Confederation of Indian Industries and Godrej Group chairman said, “Talks of inheritance tax and other such measures of additional taxation could negatively impact sentiments.”
FICCI in its representation to the PMEAC said, “...any proposal to introduce higher tax rates or inheritance or similar taxes would be highly regressive and ultimately prove counterproductive.”
The proposal was originally mooted by Rangarajan, who is a key aide to Prime Minister Manmohan Singh. But the proposal had not found favour with economists.
Industry chambers also sought policies for completion of large infrastructure projects in time and stressed that the government must announce further measures to boost business confidence that is essential for reviving growth. They also emphasised the need to reduce repo rate by 0.5 per cent and CRR to spur industrial growth.