Indirect tax rates should be kept steady: CII

NEW DELHI - In view of the persistently high inflation, Finance Minister Pranab Mukherjee should not hike indirect tax rates in the union budget Monday as it would hurt the industry’s growth, the Confederation of Indian Industry (CII) has said.

Given the inflationary environment, it is important that indirect tax rates are maintained at current levels and aligned with the proposed rates under the goods and services tax (GST), CII director general Chandrajit Banerjee said in a statement Sunday.

Finance Minister Pranab Mukherjee is set to present his sixth union budget Monday.

Banerjee said businesses were looking for a clear policy direction on economic reforms and growth from the finance minister.

With the economy having recovered steadily from the downturn, industry is looking for a new phase of steady investment and growth. The budget can provide policy direction by announcing measures to encourage investments which will offset the negative impact of rising interest rates, he said.

Banerjee also emphasised on the need to reform agriculture marketing system to help control food inflation.

The finance minister could also use this opportunity to reform agricultural markets so that the episodic food inflation can be avoided. Investment in agriculture and rural infrastructure is required to be stepped up in order to improve the productivity of crops, he added.

Food inflation moved up to 11.49 percent for the week ended Feb 12 as compared to 11.05 percent in the previous week. The barometer for measuring food prices has remained in high double-digits for most part of 2010-11.

The annual inflation based on wholesale prices stood at 8.23 percent in January.