By IANS
New Delhi : The Prime Minister’s Economic Advisory Council (EAC) Wednesday suggested some adjustments in the income tax slabs in the upcoming national budget to boost consumer demand, even as it saw the Indian economy growing 8.5 percent in the next fiscal (2008-09).
In a pre-budget meeting with Finance Minister P. Chidambaram, the council, led by former Reserve Bank of India governor C. Rangarajan, however, said that the actual tax rates could be kept at the same level.
“There’s a possibility of increasing public expenditure,” Rangarajan said as the council expressed concern over the recent slowdown in the growth rate of India’s manufacturing sector.
“We said there could be some adjustment in indirect taxes to stimulate growth in consumer durables,” he told reporters here. “Tax rates can be kept as they are,” he added, emerging from a meeting with the finance minister and his budget team.
“The overall view is that the economy would grow at 8.5 percent in 2008-09. But there are some areas of concern like manufacturing.”
It will be Chidambaram’s fifth national budget for the United Progressive Alliance (UPA) government since it assumed office in May 2004 and the seventh for him personally.