New Delhi: The Prime Minister's Economic Advisory Council has recommended that the Finance Minister should adjust indirect taxes on consumer goods in Budget 2008.
This move, the EAC feels, will give manufacturing growth a push, and help maintain economic growth at around 8.5 per cent. The Council also advised the Finance Minister to increase public investment, and make adjustments in the income tax slab to stimulate the economy. The council did not, however, give any specific suggestions regarding reduction in tax rates.
C Rangarajan, Chairman, PM's Economic Advisory Council, said, “I think in general, the view is that we should keep the tax rates the way they are. But some adjustments in the income tax could be possible, in the slabs etc; not any substantial reductions.”
It is asking the Finance Minister for tax sops on consumer goods in Budget 2008. It hopes this will push manufacturing. The recent November IIP numbers were down in the dumps.
“Our view is that the economy will grow at about 8.5 per cent, but there are some areas with weaknesses, like the manufacturing sector. So, we discussed what can be done to stimulate the economy like increase in public investment can be done and seeing if some adjustment in the indirect taxes can be done, in order to stimulate the durable consumption sector,” stated C Rangarajan.
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