Next Government Should Lower Corporate Tax: Industry Body

CII said the next government should lower the corporate tax to 18%

Making suggestions for drawing up election manifestoes for the upcoming polls, industry chamber CII on Sunday said the next government should lower the corporate tax to 18 per cent and increase the public expenditure on healthcare and education.

A statement by the Confederation of Indian Industry (CII) said their "suggested election manifesto" favoured the "lowering of corporate income tax to 18 per cent with no exemptions to make Indian tax rates globally competitive".

Currently, the corporate tax for companies with turnover of up to Rs 250 crore is 25 per cent, and for those with a turnover of over Rs 250 crore it is 30 per cent.

The suggested manifesto said public expenditure on healthcare should be increased to 3 per cent of the GDP.

"The healthcare sector should be notified as an infrastructure sector. Reducing India's maternal and infant mortality ratios must be taken up on priority basis," the statement said.

The CII note advocates raising public expenditure on education to 6 per cent of GDP. It suggests making vocational training part of the curriculum and incentivising better performance of teachers with upgraded digital school infrastructure, especially in rural schools.

"A key measure would be to link universities with the industry and increase government funding for R&D (research and development) to 1 per cent of GDP," it said.

The industry body also targets an average GDP growth rate of 8 per cent per annum for the next five years and called for reducing the Good and Services Tax (GST) rate slabs to 2 or 3, from the current four slabs of 5, 12, 18 and 28 per cent.

Commenting on the suggestions, Chandrajit Banerjee, director general, CII said: "The CII suggested manifesto envisages a continued high pace of reforms, enabling India to take a lead in a world of multiple transformations in the global and technology environment."

According to the suggested manifesto, industrial corridors and sector-specific industrial parks need to be promoted through public-private partnership.

Micro, small and medium enterprises (MSME) should be allocated 25 per cent land in industrial corridors at lenient rates, it said.

In the infrastructure sector, public-private partnerships needs to be strengthened, and the issues of delayed projects and delayed payments to project contractors must be addressed, it added.

On electoral reforms, CII suggests devising a model for simultaneous elections of Parliament and State Legislatures from 2024.

CII said it has shared the suggested election manifesto with all the major political parties, both national and regional, for their consideration and inclusion in their party manifestos.