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New Delhi: The Budget session of Parliament is likely
to start on February 23 and the general budget for the
year 2006-07 will be presented on February 28, sources
said.
The Finance Minister P. Chidambaram held a meeting today
with eminent economists here today as part of the pre-budget
consultations with various interest groups. Welcoming
the participating Economists, the Finance Minister invited
them to give suggestions for the forthcoming Union Budget.
The various suggestions offered by the economists include
the following:
• Remove endowment restrictions on investment
allocation for expanding higher education facilities,
which is a crying need at this stage of the country’s
economic development.
• Introduce a new regulatory architecture for
higher education for removing entry barriers, enhancing
quality of education and improving access of disadvantaged
groups to such education.
• Change the rules governing ‘not for profit’
educational institutions for encouraging greater involvement
of private enterprise in higher education.
• Consider introduction of an ‘inheritance
tax’ with tax concessions for philanthropic
contributions to educational institutions on the lines
prevailing in the US for encouraging growth and expansion
of educational institutions.
• Offer scholarships to children entering sixth
standard, on the lines of the existing National Talent
Search scheme, for improving enrollment in upper primary
(6th-8th standards) schools and also monitoring outcomes.
• Reduce customs duties and narrow the gap between
peak and floor rates.
• Remove the existing exemptions from the indirect
tax regime.
• Maintain the existing corporate income tax
structure but review the existing exemptions.
• Simplify and rationalize the indirect tax system
by removing existing exemptions for the small scale
sector and special category States.
• Remove the Central Sales Tax by announcing
a road map for its elimination, to derive the maximum
benefit of the new State level VAT regime and to ensure
optimum location of economic activity across States.
• Implement autonomy measures for unlocking productive
potential of public sector banks.
• Emphasize expansion of rural non-farm activities
in the overall policy thrust on rural development.
• Carry forward fiscal consolidation at the State
and Central levels.
• Rationalize and simplify expenditure planning
in government departments.
• Emphasize on performance-budgeting in social
sectors and provide incentives to civil servants for
good performance at the field level.
• Include improved corporate governance as an
objective in formulation of tax policies pertaining
to taxation of capital market instruments, for example,
the issue of dividends in the hands of the recipients.
• Increase budgetary allocation for community
care homes and crisis centres.
• Include quality, as a monitorable parameter,
in disbursing funds for enhancing drinking water facilities.
• Strengthen the scope of the National Rural
Employment Guarantee Act.
• Introduce measures for facilitating micro-enterprise
development.
• Consider introduction of subsidies for encouraging
corporate R&D.
• Introduce weighted tax incentives for different
categories of incremental exports.
• Attach export obligation requirements on incoming
FDI for increasing exports.
• Phase out tax incentives for software exports.
• Monitor the growing volume of FII inflows for
avoiding undue volatility.
• Introduce efforts for developing a vibrant
government bond market with wider participation and
involvement of the exchanges
• Ensure a prominent role for the Government
in the ongoing ‘Bharat Nirman’ initiative
with regard to service provision for the poorest sections.
• Maintain the fringe benefit tax (FBT) while
gathering experience regarding its better implementation.
The meeting was attended by eminent economists and
economic experts from various professional, educational
and research institutions of the country, along with
senior officers of the Ministry of Finance.
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