Two months ahead of the Budget for 2005-06, Finance Minister P Chidambaram on Monday promised to make tax structure simpler for petroleum, telecom, sugar and textiles sectors.
"What is common among textiles, petroleum, sugar and telecom sectors is a convoluted tax structure. We have to unravel it and make it simpler and investment-friendly. We will come up with a strategy in the next budget," he said at FICCI's annual general body meeting in New Delhi.
The government has set up a committee, headed by Chief Economic Advisor Ashok Lahiri, to streamline the duty structure of petroleum products and a report is expected shortly.
On textiles, Chidambaram said the government had announced a simpler tax regime for natural fibres and the next Budget would attempt to unravel the tax structure for man-made fibres.
The finance minister also indirectly favoured phasing out of subsidies saying a dole-led, subsidy-led, concession-led growth is not sustainable. "What is sustainable is investment-led growth," he said.
He had tabled a report, prepared by NIPFP, in Parliament last week that proposed phase-out of subsidies for LPG, kerosene, fertilisers and other centrally-sponsored schemes.
FICCI outgoing president Y K Modi suggested a slew of fiscal measures, including a cut in corporate tax rate to 30 per cent, remodelling income tax slabs, lifting of surcharge and education cess, toning up tax system required to raise industry and services sectors' growth rates to over 11 per cent and pushing up agricultural growth to 4 per cent.
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