Not much scope for tax cuts in Budget, industry told
The Finance Ministry has told industry it should not expect any major fiscal sops in the Budget to be presented by the new UPA government, which has a limited headroom for giveaways due to the economic slowdown.
In pre-Budget consultations, senior Finance Ministry officials conveyed the government's disappointment to industry for not passing to consumers the benefit of excise and service tax cuts announced in December and January, a chamber official said.
Revenue Secretary P V Bhide had convened separate meetings with industry bodies - CII, FICCI and Assocham - earlier this month.
While, the three chambers presented wish lists to the Finance Ministry, they were told that new Finance Minister would not have much headroom for any more fiscal incentives which the industry wants for boosting the economic activity.
The fiscal deficit for 2009-10 is pegged at Rs 3,32,835 crore, 5.5 per cent of the GDP. As industrial production fell, the revenue was impacted in the last fiscal.
The direct tax kitty fell to Rs 3.38 lakh crore in 2008-09 compared to the truncated target of Rs 3.45 lakh crore.
The government had slashed across-the-board by four percentage points excise duty and two percentage points service tax in two stimulus packages to limit the impact of global downturn on the economy.