Industry body Federation of Indian Chambers of Commerce and Industry (Ficci) Tuesday urged the government to move away from the aggressive revenue approach and provide a conducive tax environment.
Ficci President Jyotsna Suri urged Finance Minister Arun Jaitley in the pre-Budget consultation for creation of a conducive tax environment and suggested that revenue estimates and targets should be realistically arrived at in accordance with the state of the economy.
The industry body suggested that parameters for evaluating and reporting the performance of tax officers annually need to be revised and that the revenue realised should not be a factor in appraising the performance of an assessing officer.
“The overwhelming focus of the government machinery on revenue ‘targets’ puts too much pressure on the tax officers to maximise revenue collections leading to arbitrary assessments,” Suri said.
“Revenue generation is primarily dependent on the economic activity in the country; revenues cannot be enhanced by prescribing artificially high targets for the tax officers.”
Suri stressed the need for bringing down the high cost of capital which has emerged as a major hurdle in Indian industry’s competitiveness.
“Reduction in interest rates will give a boost to demand (for housing and consumer durables) as well as investments (especially for micro, small and medium enterprises) which will have a spiralling effect on overall investment and growth cycle,” she said.
Ficci said that it expects the Reserve Bank of India (RBI) to consider easing the monetary policy as inflationary pressure was coming under control.
Ficci appreciated the government’s efforts towards fiscal consolidation amidst expectations that the expenditure management commission’s report will lay out a roadmap for rationalisation of subsidies and curtailing of non-productive expenditure.
“This will enhance the scope for more productive capital expenditure, especially for infrastructure, which will have a positive effect on economic growth and development,” the industry body added.