More tax sops likely in Interim Budget: Assocham

The government is likely to come out with sector specific packages and more tax sops in its Interim Budget tomorrow to stimulate the contracting economy, industry body Assocham has said.

External Affairs Minister Pranab Mukherjee, who is also holding the finance portfolio and would present the budget, may unveil measures for farmers and general public to help them come out of the slow down in economy and offer tax cuts to India Inc, an Assocham survey said.

The chamber conducted the survey on its 400 members from sectors such as manufacturing, services and agriculture.

"Over 70 per cent participants exuded optimism saying Mukherjee is likely to announce packaged deal for cement, manufacturing, agriculture, textiles, steel, real estate and IT sectors," the survey said.

One of the major demands of the industry is reduction in corporate tax, which is over 33 per cent and has not been altered for many years, the Assocham survey said.

"India Inc anticipates that Mukherjee would revisit corporate tax rates and not only remove surcharge on it but bring it down at global average of 26-27 per cent in the times of meltdown," Assocham President Sajjan Jindal said.

About 60 per cent of the CEOs believe that Mukherjee is also expected to announce increase in personal tax (exemption) ceiling and introduce measures to hike subsidies, put in place series of low-cost housing schemes and revamp public distribution system.

The chamber said 80 per cent of the participants said there is a need for across-the-board reduction in excise duty. They also urged the government to keep its promise of introducing Goods and Services Tax by 2010.

On India's external trade, the survey said, "Export targets will be extremely difficult to be realised as outward shipments are likely to remain short by about 30 per cent in this fiscal."

It also said that most of the participants expect the inflation to go down further in the near future. However, the major challenge before the government would be to explore ways so that prices further moderate, Jindal said.