Mukherjee said keeping inflation and fiscal and revenue deficits at manageable levels is the key challenge that needs to be addressed collectively.

The industry leaders contended that FRBM should be amended and a blueprint for reduction in fiscal deficit charted out in the next five years to help infuse a discipline in raising revenues and containing expenditure.

They also suggested widening of the service tax base with a negative list and grant of exemption to infrastructure companies and special economic zones from minimum alternate tax.

For the record, a committee of state finance ministers on service tax agreed on a negative list last month. The recommendation, if accepted, could swell the Centre’s revenue from service tax by 20-25%.

All the services barring those in the negative list will be taxed by the government, against the existing system of taxing 125 items.

A shift to accrual-based budgeting from cash-based budgeting was also among the suggestions, for better outcome of money spent.

Industry also wants the government to revisit dividend distribution tax, and bring disinvestment again on its radar, with a roadmap.

In order to improve healthcare, it was suggested that a benefit of tax deduction of `10,000 be given to the citizens for preventive health check-up — on the reasoning that it is better to invest in preventive healthcare than in curing the disease.

The representatives also called for denotifying fruits, vegetables, milk and other perishables from APMC list.

On exports, it was suggested that the interest rate be kept at 7% for micro, small and medium enterprises and at 9% for others, or subvention be provided to all sectors of exports for next fiscal. Among those who attended the meeting were B Muthuraman from CII, RV Kanoria from Ficci, RN Doot from Assocham, YC Deveshwar of ITC, Nitin Paranjpe of Hindustan Unilever, Tulsi R Tanti of Suzlon Energy and Dr Naresh Trehan of Medanta.

Source: Daily News & Analysis, India,  dated 04/02/2012