Financial institutions on Friday asked for more measures to increase investment in infrastructure and agriculture to spur growth in the economy, in addition to tax breaks.
Finance minister Pranab Mukherjee held an extensive pre-budget meeting with financial sector regulators like Pension Fund Regulatory and Development Authority (PFRDA), Insurance Regulatory and Development Authority (Irda) and Securities and Exchange Board of India.
Leading bank and financial institution honchos were also present at the meeting, where they mooted dilution of government stakes in public enterprises. ?All of us were of the consensus that this is the time to promote growth in the country and therefore this is the time to promote investment in various sectors in capacity building, infrastructure and agriculture. We have made a lot of recommendations of how funds can flow better in all these sectors whether it is bank fund, whether it is through deepening of corporate bond market, funds from insurance sector, pension sector, mutual funds and so on,? ICICI Bank managing director and chief executive officer Chanda Kochhar said after meeting Mukherjee.
Kotak group chairman Uday Kotak pitched for disinvestment in government undertakings to bridge the fiscal deficit, which bloated to 6% of gross domestic product during 2008-09. ?We have strongly recommended disinvestment so that the government can get the proceeds to take care of the fiscal deficit. We have suggested the potential changes in FBT (fringe benefit tax) and STT (securities transaction tax). Many other suggestions were given including provisioning for banking NPAs. FM listened to us very carefully.?
PFRDA chief D Swarup recommended ?tax benefit for pension products at par with other saving instruments?, while IRDA chairman J Harinarayan asked for tax exemption for ?long-term products. IRDA also recommended increasing the period to which losses could be carried forward to 10 years.
Finance Industry Development Council, a lobby of asset financing non-bank finance companies asked for expanding the coverage of SARFAESI Act. ?We have asked for income tax benefit under sector 36(1) and 43D in addition to TDS exemption on lease rentals and expansion of SARFAESI Act to all NBFCs. We were supported by banks and other financial institutions in our demands,? FIDC co-chairman Raman Aggarwal said.