FM hints at moderate tax rates; more reforms

Ahead of the Budget exercise, which is set to begin on Wednesday, Finance Minister P Chidambaram on Tuesday hinted at further moderation in tax rates, deepening of reforms and cut in wasteful expenditure.

Large proportion of people pay their due taxes now because of moderate and stable tax rates, he said, adding: "There is scope for further moderation... however, this will depend on greater tax compliance."

Broadening the base of reforms had enabled India to become a major economic power, Chidambaram told the economic editors.

"We have miles to go before we rest. What is needed is not less but more reforms. Reforms to sustain growth at 8-10 per cent for at least two decades... to achieve balanced growth with equity," he said, inaugurating a two-day Economic Editors' Conference in New Delhi.

The foremost challenge to sustain the growth momentum set out in the 11th Plan, beginning next fiscal, required a mix of right policies and new initiatives without compromising on financial stability and fiscal prudence, he said.

He made it clear that it was unlikely that a pause button would be pressed on meeting the deficit reduction targets set out in the Fiscal Responsibility and Budget Management Act to find additional resources for plan.