CHIDAMBARAM INDICATES SOFTER TAX RATES
CHIDAMBARAM INDICATES SOFTER
TAX RATES
New Delhi
The
Economic Times
Busy preparing the union budget 2007-08, Finance Minister P
Chidambaram Thursday indicated moderation in tax rates next fiscal following
improvement in tax collection.
In a wide-ranging interview to NDTV,
telecast Thursday night, the finance minister also hoped of a dramatic
improvement in the country's financial sector climate if the Left parties
support the government on key issues of reforms, particularly involving the
Banking Bill and the Pension Bill.
Hinting a cut at the tax rates, the
finance minister said: "If tax compliance improves, there is scope for
moderation... I concede that tax collection has improved among corporates as far
as corporation tax is concerned but I can't say the same about excise duties."
Talking about fiscal and revenue deficit targets of the budget,
Chidambaram said he would try to "reach the budget targets of fiscal deficit and
revenue deficit".
"But to expect that I'll do much better than the
budget targets is unrealistic."
Expressing satisfaction at the
achievement of a growth rate of nine percent, the finance minister said it "was
not an accident but the result of the government's coherent policy".
He
said: "Nine percent is not an accident. Nine percent is the result of pursuit of
a coherent policy, namely promote investments, improve the climate for
investment, help in whatever way you can to improve productivity, improve the
trade intensity of India's GDP, and make more sectors of the economy open to
competition... There's no reason why we cannot maintain this over the next few
years."
On the issue of pursuing key reform, the minister said: "When I
took on this job I was aware that we are in a coalition I was aware that the
Left has particular point of view. I am still hopeful that we can get over the
last hurdle in terms of the Pension Bill."
"The Banking Bill is stuck at
a clause, we have to negotiate that. The Insurance Bill will be introduced
towards the end of the budget session. Even if we can take one step at a time,
and get my Pension Bill through, and get over the last hurdle in the Banking
Bill, you will find that in 2007-'08 there is a dramatic improvement in the
climate of the financial sector."
Touching upon the controversy
involving the acquisition of farmland for setting up special economy zones
(SEZ), Chidambaram said generally barren or wasteland should be acquired for
setting up SEZs.