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The introducing of the new income tax code, the reforming of the existing tax structure and duties and the slashing of subsidies on fuel, fertilisers and food were some among the measures which have been suggested by the Economic Survey.
The survey has called for creation of a new income tax code to bring about a neutral tax regime.
Among the other tax reforms, it was suggested that taxes like fringe benefit tax, commodity and security transaction taxes should be “abolished”. It has also called for the implementation of the goods and services tax by April 1, 2010.
Rationalisation of the dividend distribution tax (DDT) is yet another vital proposal of the survey.
The dismantling of the inverted tax structure is expected to bring down the prices of domestic manufactured goods and make Indian industry globally competitive.
Adopting an aggressive reformist approach, it called for a huge reduction in various subsidies prevalent on fuel, fertilisers and food. Prominent among them are:
- Limit subsidy on cooking gas to six to eight cylinders per household
- Kerosene subsidy only for non-electrified, non-cylinder homes
- Provide fertiliser subsidy directly to farmers
- Convert production subsidies into direct consumer subsidies
- Review customs duty exemptions and move to uniform duty structure
