Industry body CII has made a case for bringing down the corporate tax rate to 18 per cent along with elimination of all exemptions saying it will not result in any loss to the exchequer.
The Modi 1.0 government had proposed to bring down the corporate tax rate from 30 per cent to 25 per cent gradually. The government has already reduced it to 25 per cent for companies having turnover of less than Rs 250 crore.
"We are supporting a reduction in taxes along with reduction in exemptions and a very simplified tax code. Our numbers show that 18 per cent corporate tax along with zero exemptions could be revenue neutral. We would prefer to go in that kind of direction," CII President Vikram Kirloskar told PTI in an interview.
Finance Minister Nirmala Sitharaman, who is holding pre-Budget consultations with different stakeholders, including industry, will be presenting the first Budget of Modi 2.0 government on July 5.
Kirloskar also suggested that the government should take measures to spur investment and growth, which slowed to five-year low of 6.8 per cent in 2018-19.
"If equity cost is high, people will not invest. Right now equity is taxed at dividend level as well as capital gains tax level. You certainly cannot grow an economy only on debt. So we need to have equity getting into investment and hard assets being built up," he said.
To push investment, he further said the government should address issues concerning land reforms and labour laws.
The newly-elected president of the industry chamber also exuded confidence that with strong government in place, the country is poised to achieve 7 per cent plus economic growth.
"We are confident that by the end of the year, by the third or fourth quarter, we will recover back to 7 per cent plus," he said while adding that the last few months were tough for the economy.
When asked about the high unemployment rate as per the government data, Kirloskar said he was "not so comfortable" with the NSSO data.
"I am not so comfortable with the NSSO data...we are doing our numbers (based on industry survey). I think the NSSO data is based on households. It is showing big differences," he said.
The recent NSSO data showed that unemployment at 6.1 per cent of total labour force during 2017-18 was the highest in 45 years.
On withdrawal of Generalised System of Preference (GSP) by the US on imports from India, Kirloskar said the move would hurt a small part of the country's trade.
"Looks like GSP is going to hurt some people, not only here but also on the importing side. Some people may say it is a very small part of the trade but if a few individuals are going to be affected we have to take care of them," he said.
The CII president expressed hope that the automobile sector sales, which is down due to several reasons, would revive in the months to come.