With the prices touching a two-year high, CEOs of leading companies expect a cut in corporate tax and measures to boost the capital markets in the Budget 2007-08 to be presented on February 28.
A high 72 per cent of 150 CEOs and Managing Directors surveyed by the Assocham Business Barometer anticipate that the Finance Minister P Chidambaram will bring down the peak level of customs duties of 12.5 per cent to 10 per cent to improve supplies of both essential commodities and the raw materials for industrial goods.
Ninety per cent of the corporates are hopeful about broadening of the tax base, enabling the Finance Minister to garner more resources, in the Budget.
A majority of respondents feel that the Finance Minister may also eliminate the controversial Banking Cash Transaction Tax -- imposed in the last Budget -- at the rate of 0.01 per cent on withdrawal of cash by individuals and corporates beyond Rs 25,000 and Rs 100,000 in a single day.
A large chunk of corporate India expects a cut in the corporate tax rate applicable on the foreign companies in the Budget, though a consensus could not be drawn as to the extent of reduction.
Nearly 48 per cent of the CEOs are confident that the tax rate on foreign companies would be reduced to bring them at par with the industry at 30 per cent.
As many as 83 per cent of the respondents feel there could be a change in service tax rate since the road map for the composite GST has already been announced.
A reduction in the peak rate of customs duties would be in alignment with the commitment of the Indian Government to bring down tariff rates to ASEAN levels, they feel.
The banking industry has been facing the problem of deposit mobilisation with the upsurge in the credit demand and increase in the cash reserve ratio and repo rate. The CEOs expect some positive steps by Chidambaram to boost bank deposits. This could be in the form of relaxation in the lock-in-period for time deposits.
Inflationary pressures and the fact that the global crude prices are moving southwards, the FM may give a further cut in excise and customs duties on diesel and petrol in the forthcoming Budget, a significant section of the India Inc feels.
To give a boost to the agriculture sector, the industry is hopeful that budgetary allocations for the farm sector may go up, coupled with a package of duty cuts for the food processing sector.
''Special attention to agriculture in the Budget is pre-requisite for increasing its productivity and sustaining a nine per cent GDP growth,'' Assocham chief Venogopal N Dhoot said.
To expand the primary as well as higher education, the corporate sector envisages a higher allocation for this sector too.
Infrastructure is another focus area for the government and about 63 per cent of the company heads say a good number of tax sops are on the anvil for the companies investing in sectors like roads, highways and ports.
A majority of respondents anticipate measures to induce rural infrastructure investments. Seventy-four per cent of them feel that the investment inducing measures may include tax concessions, subsidies and tax deductions.
