Unions pitch for hiking I-T exemption limit to Rs 5 lakh/annum

Trade unions today demanded 12% interest on PF contributions of employees and a hike in income tax exemption limit to Rs 5 lakh in their pre-budget meeting with Finance Minister P Chidambaram.

The unions have also asked the government not to raise FDI cap in financial sectors like insurance and banking.

The I-T exemption limit for individuals stands at Rs 2 lakh per annum at present.

Several unions, including CITU, AITUC, INTUC and BMS, in a joint memorandum to Chidambaram have expressed their opposition to the banking reforms bill saying it would encourage private banking at the cost of public sector banks.

They also demanded that a progressive taxation system be put into place and concrete steps be taken to recover large accumulated tax arrears, effective measures to unearth huge accumulation of black money, including the unaccounted money in tax heavens abroad.

Chidambaram, while making his opening remark at the meeting with the representatives of 12 trade unions, said that a slowdown in the manufacturing sector is creating unemployment and there is a need to create job opportunities.

"There is a need to revive investment in manufacturing and service sector in order to create higher job opportunities," he said, adding that there was a slowdown in investment in manufacturing sector as a result not enough jobs were created.

"At present, the economy is passing through a difficult phase mainly due to external factors and, therefore, there is immediate need to tide over the current situation and then move to the path of higher growth," he added.

Chidambaram said that higher growth leads to creation of more jobs. "Trade unions can play an important role in reviving the manufacturing sector which in turn can lead to creation of more job opportunities in the sector," he said.

Other proposals made in the joint memorandum include taking effective measures to arrest the spiralling price rise, ban speculative forward trading in commodities, massive investment in the infrastructure to stimulate the economy.

The trade unions also sought minimum wage be guaranteed to all workers, special allocation for creation of a Welfare Fund for protecting the interest of unorganised workers and raising minimum wages to Rs 10,000 per month.