What India Inc Wants From Budget 2013?

Bangalore: The upcoming Union Budget looks pretty uninteresting for India Inc. Almost everything is the same old in it. Even though CII, Ashocham and Ficci met the finance minister recently, their discussions were as same as to the discussions of the other times. The focus of the Government was more on taxes, investments and also on the recent hike of the railway fares. The Government decided to keep important issues like GAAR (General Anti Avoidance Rules) silent till 2016.

Despite of the several appeals of the chambers like lowering the import duties, early implementation of the GST (Goods and Services Tax) regime, etc. there was nothing new. However the topic on the ‘Inheritance Tax’ was one of the highly discussed topics on that meet. The representatives opposed this tax strongly.

According to Naina Lal Kidwai of Ficci, this type of taxes should not be imposed. She also added “in a hurry and without extensive debate which must necessarily encompass the societal ramifications as these are likely to be significant.”

CII President Adi Godrej said, "We have said any increase in taxes (on rich) will create a negative perception on investment and therefore should be avoided."

To define Inheritance tax: it is the tax which is summoned on a person who inherits money or property, or a tax on the estate (total value of the money and property) of a person who has died. When one dies, the government assesses the worth of the estate of the deceased, which may include cash in the bank, investments and any other property or business owned by the deceased.

Someone from the industry chambers also said, “inheritance tax is very much a developed-economy phenomenon. Apart from Turkey, no other developing country has an inheritance tax. The common refrain was- 'Don't disturb the tax structure'.”

When asked by “Money Control” team, Kidwai also said that she is not surprised that the governor continues to be cautious because while inflation come down, the decline has not been significant. Segments like food inflation have actually gone up. However, I believe a lot of the food inflation is due to inflation in the supply side and not by demand.

Godrej concluded telling that “There is no question that he (Finance Minister) is in a difficult position but the best way to tackle this difficult situation is to collect more taxes through higher growth, not through higher rates of taxes. India has never been successful in increasing rates of taxes whether direct or indirect.  In fact it has been the other way round. So, we have not asked for a reduction in excise duty or service tax, but clearly stated that there should be no increases either.”

Anand Mahindra, Chairman of Mahindra & Mahindra said that the Finance Minister was more interested in boosting up investments, to utilize investments from overseas. He also added, "We are on the verge of making a very major investment but we are held up by an uncertain regulatory regime that is all this talk about taxes on diesel cars,"

At last, both Ficci and CII concluded that the current levels of excise duties can be maintained if they gets lowered.