New Govt should take more fiscal steps: FICCI

The new government, which is likely to be in place this month, should take more fiscal measures to boost the economy rather than phasing out tax exemptions to businesses, industry body FICCI has said.

The new government, which is likely to be in place this month, should take more fiscal measures to boost the economy rather than phasing out tax exemptions to businesses, industry body FICCI has said.

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In a representation to the Finance Ministry for consideration of the new government, FICCI said "phasing out tax benefits may thwart its efforts to beef up economy".

"The (new) government should not only continue, strengthen fiscal incentives and introduce new ones as and when economically warranted, especially for ‘sunrise industries’, and undertakings engaged in infrastructure and other crucial sectors," it said.

The economic growth during the 2003-2008 period was triggered on the back of a rising investment curve, the chamber said.

"What is causing concern is that over the last two years the government has been engaged in reviewing and phasing out tax exemptions and incentives largely owing to its feeling that these are costing the exchequer substantially," it said.

The policy makers need to identify sectors that have significant forward and backward linkages and put in place attractive incentives to encourage investments in areas like housing and real estate.