CEOs seek simplified FBT
Industry honchos, however, feel it would come as a major morale-boosting factor if the controversial tax is removed altogether.india Updated: Feb 23, 2006 19:07 IST
Industry honchos appear reconciled to the fact that the government is in no mood to scrap Fringe Benefit Tax, but are hoping that Finance Minister P Chidamabaram will make some changesin the controversial tax.
The Fringe Benefit Tax though may be continued would be in a much reformed manner. Industry expectations are quite high as regards simplification of this taxation, an Assocham Business Barometer survey has said.
However, the CEOs felt that it would come as a major morale-boosting factor if the FBT is removed altogether.
It is believed that the banking cash transaction tax (BCTT) introduced last year will be reviewed, says the survey.
Key infrastructure areas like roads, ports, airports and electricity are expected to be the main focus areas in the forthcoming budget even as Finance Minister P Chidambaram in his attempts to give relief to the common man would find it difficult to suggest revision in petroleum andLPG prices, industry chamber Assocham said.
A whopping majority of 80 per cent out of the 200 CEOs interviewed in the Assocham Business Barometer survey said the budget of 2006-07 would aim at consolidating various initiatives already announced in the field of infrastructure.
"There seems to be an increasing realisation among the economic managers of the government that the GDP growth of eight per cent would become difficult to sustain if the major infrastructure projects like Rs 170,000-crore Bharat Nirman and Rs 100,000-crore National Urban Renewal Mission do not take off," Assocham president Anil K Agarwal,said.
About 70 per cent of CEOs said in view of the impending assembly elections, the budget would not be harsh on the common man. Pressure from its allies, the Left and the forthcoming Assembly elections in Kerala, West Bengal, Tamil Nadu and Assam, would surely have a bearing on the Budget.
In the Crude oil sector, nearly 60 per cent of the corporate honchos said even as the Rangarajan Committee has come out with a road-map for restructuring the excise and customs in the petroleum sector, the government could find it difficult to go in for a sharp revision in the prices of petrol and LPG.
Nearly 75 per cent of the CEOs, including bankers, agreed the major challenge for the Finance Minister was, mobilization of resources for enhancing spending on social sectors like health, education and the poverty alleviation programmes like the National Employment Guarantee Act.
While tax- GDP ratio remains below 10 per cent, the best way for enhancing the revenue generation for the exchequer would be to ensure continuous growth of eight per cent and even aiming for 10 per cent for the 11th Five Year Plan. The GDP growth, coming as it is from the industry and a vibrant services sector would yield much higher revenue to the exchequer, the business leaders felt.
Nearly 60 per cent of the CEOs said if the sixth Pay Commission is notified, the move would not impact the centre and state finances.
In the survey, the corporate heads also suggested revitalising the public distribution system, specific schemes for promoting self-employment and attracting private sector investment in infrastructure, education and other sectors.