India Inc urges govt not to raise excise, service tax

Concerned over the possibility of withdrawal of stimulus packages in the upcoming Budget, India Inc has urged Finance Minister Pranab Mukherjee not to raise excise or service tax till the economic growth rate reaches pre-crisis level of nine per cent.

"We are afraid that roll-back of stimulus packages, even partially, could derail the growth process and adversely impact the industrial sector," Ficci President Hash Pati Singhania told PTI.

The stimulus packages should continue for another year or at least till October 31, he said, pointing out that the economy is yet to achieve the pre-crisis level of nine per cent.

The Finance Ministry is believed to be considering partial withdrawal of stimulus given to the industry to combat the impact of the global financial crisis triggered by the fall of financial services firm Lehman Brothers in September 2008.

The Budget is slated to be presented on February 26.

As part of the stimulus, the government reduced the excise duty in two tranches from 14 per cent to 8 per cent and service tax from 12 per cent to 10 per cent.

CII Director General Chandrajit Banerjee too, while responding to queries send by the PTI on withdrawal of stimulus said, "the very fact that we have had the worst financial crisis since 1929, involving the entire globe, reflects that recovery will be slow and enduring, with ample risk of double dip recession on the way."