May 28, 1998
Assocham for retention of direct tax slabs
A Special Correspondent
As part of its pre-Budget wish list, the Associated Chambers of Commerce and Industry -- Assocham -- has asked the government to retain direct tax rates at existing levels, while turning its face against any move to introduce higher slabs and surcharges for the 'super rich'.
Such moves, Assocham president L Lakshman warned, will cripple savings and investment while delaying the process of industrial revival, and adversely affecting revenue collection.
While conceeding the need to generate more resources, Lakshman argued that a better method would be to introduce innovative schemes for infrastructure development. The opening up of the insurance sector, tapping into pension and provident funds, and the tapping of NRI investments were mentioned as possible alternatives.
Calling for the phasing out of non-plan expenditure and non-merit subsidies, Lakshman said the finance minister should come out with a special economic package for domestic and foreign investors. This, he said, would boost the demand for industrial goods which, in turn, would provide the key to economic recovery.
Lakshman suggested that the package should highlight housing and construction, since these sectors generate employment and, further, creates demand for basic goods.