India Inc on Saturday pressed for reduction in corporate tax,
raising of personal income tax exemption limit and steps to mitigate the impact
of demonetisation on the economy.

Finance Minister Arun Jaitley, who heard the industry in his
customary pre-budget meeting, asked them to step up investment.

They suggested that the income tax exemption limit be raised
to Rs.5 lakh and interest rate be reduced to give a boost to the manufacturing
sector.

The industry said that lower corporate tax and withdrawal of
tax incentive would result in higher collections and also make India an
attractive investment destination.

The other suggestions include elimination of Minimum
Alternate Tax (MAT) and increase in public investment in infrastructure and
social sectors.

Talking to reporters after the meeting, industrialist Rajan
Mittal said, “Demonetisation issue was discussed in the meeting. We need
to make sure that the inconvenience that some of the people are facing must get
better and I am sure they (government) are working on it.

“I think the government understands (the situation) and
they well recognise that in short term there will be some pain … What more
can be done to enhance consumption, production and investment. Those
discussions have taken place”.

Finance Ministry in a statement said that the industry
demanded that after demonetisation, since banks will have lot of funds,
therefore, interest rate should be reduced for manufacturing and other sectors
especially for micro, small and medium enterprises.

Industry also suggested that the government accelerate PSU
disinvestment, reduce corporate tax to 18 per cent including all surcharges and
cess, and cut in minimum alternate tax.

These issues among others were raised during the pre- Budget
meeting between Finance Minister Arun Jaitley, industry chambers and exporters.

“Jaitley asked the representatives of Business and
Trade Sector to increase the private sector spending especially in
infrastructure sector,” the ministry statement said.

The Government has taken many steps to improve governance by
bringing in transparency and efficiency through systematic changes, Jaitley
added.

Exporters body FIEO President S C Ralhan suggested creation
of export development fund to boost shipments.

Sharing similar view on demonetisation, Ficci President
Harshvardhan Neotia said demonetisation will have a short term impact on the
economy.

CII said that while the demonetisation is right and welcome
move for the long term, “it is widely felt among industry members that we
need to offset the immediate downturn that industry will go through”.