Finance Minister Arun Jaitley, on Friday, described the economic situation as challenging even as India Inc pressed for tax concessions and bold reforms to reignite the investment cycle and promote growth.

In over two hour long pre-budget consultative meeting with the Finance Minister, captains of industry listed out a host of demands, including lowering of tax rates, easing of gold import curbs, clarity on retrospective tax law amendment and early roll out of the Goods and Services Tax (GST) and the Direct Taxes Code (DTC).

Mr. Jaitley, on his part, pointed out that “the economic situation at present is quite challenging” and welcomed the enthusiasm of the industry to turn it to its advantage.

He further said it was a ‘constructive meeting’ and promised to give directional thrust to the economy to ensure better results.

“The government should make earnest efforts to move away from the aggressive revenue approach and provide a genuine non-adversarial and conducive tax environment,” said Federation of Indian Chambers of Commerce and Industry President Sidharth Birla. Confederation of Indian Industry President Ajay S. Shiram, in his presentation, pressed for an amendment to the Income Tax Act, which would promulgate the reversal of retrospective amendment and make all taxation prospective.

“A simple, transparent and non-adversarial tax regime bereft of complexities and ambiguities would go a long way to strengthen business sentiment and restore faith of foreign investors in the India growth story,” Mr. Shiram said. Among others, the meeting was attended by Assocham President Rana Kapoor, PHD Chamber President Sharad Jaipuria, Bharti Enterprises Chairman Sunil Mittal, Biocon chief Kiran Mazumdar-Shaw, Essar group Shashi Ruia, Suzlon group Chairman Tulsi Tanti and Videocon group chief V. N. Dhoot. While pitching for service tax exemption for exports, Federation of Indian Export Organisations President Rafeeque Ahmed said the Finance Minister had indicated that there would not be any populist measures in the budget.

Bharti Enterprises Chairman Sunil Mittal said “industry pitched for reviving the investment sentiment, making tax regime much more simple to understand, take away ambiguities.”

On the telecom sector, he said, there was need to give boost to the sector and also auctioning of more spectrum.

According to Assocham’s Rana Kapoor, a healthy fiscal situation can significantly reinforce the growth momentum provided by other structural reforms.

Fiscal consolidation

“High on the government’s priorities should be to adhere to the path of fiscal consolidation while not compromising on the quality of adjustment. It is critical to signal control over policymaking with the objective of improving the growth-inflation balance in the economy,” he said.

Biocon chairperson Kiran Mazumdar-Shaw, “We covered manufacturing as a thrust sector, innovation, entrepreneurship, job creation. Basically, the government is committed to kickstart the economy and other issues discussed were pertaining to service tax and exemptions.”

Industry also demanded the income tax exemption limit to be raised to Rs.5 lakh from the existing Rs.2 lakh and deferment of GAAR for at least next three years and exempting dividend from MAT.

Videocon Group Chairman Venugopal Dhoot said, “We spoke about exemption in income tax to people who are having Rs.5 lakh income annually. They should be exempted from IT because with Rs.5 lakh, nothing happens in a city like Delhi.”

Gems and Jewellery Export Promotion Council Chairman Vipul Shah asked the Finance Minister to scrap import curb on gold.

Renewal energy needed priority attention and the industry had sought FDI exemption in renewal energy projects, Suzlon Group Chairman Tulsi Tanti said. Meanwhile, Finance Ministry sources said the mood was optimistic. Most corporates demanded tax related concession.