India Budget 2013-14: Concerns over CTT, industry worried over likely new taxes

According to Associated Chamber of Commerce and Industry (ASSOCHAM),"the Indian industry is holding its breath anxious whether it will face any new taxes at a time when the economy instead needs a booster dose for growth, an ASSOCHAM quick poll indicated."
“Tax revenues are not likely to show big rise in the wake of modest economic expansion. The only option before the government is to cut expenditures to get back to the fiscal discipline over which there are no choices available,” said the poll report.
Meanwhile the commodity futures industry and the Ministry for Food and Consumer Affairs have raised concerns over possible announcement of Commodity Transaction Tax (CTT) on the lines of Security Transaction Tax (STT) which is likely to cause trade volumes to fall in a yet to mature futures market.
Meanwhile, the Economic Survey presented on Wednesday has addressed key concerns of the economy and the need to curb imports of crude oll and gold to contian the current account defict.
"The Survey highlights the current account deficit as one of the key concerns in the economy and it has acknowledged that there is limited room to increase exports in the near term. The CAD has widened to 4.6% in the first half of the fiscal year and we expect it touch almost 5% for FY2013, so we believe that attracting capital inflows in the economy is pertinent to finance the CAD. In this context, the Survey has rightly observes that long term and stable capital inflows should be accorded priority to minimize the reversal of capital in risk-off phases," according to Dinesh Thakkar, Chairman and Managing Director of Angel Broking.
"Another key concern in the economy is that the savings rate has decelerated dramatically to 30.8% from its peak level of 36.8% in FY2008. The high preference of households for savings in non productive physical assets like gold is also adding to pressure on the already burgeoning trade and current account deficit. In this regard, the forthcoming budget can take some steps to boost savings in financial assets, and thus discourage demand for gold, by increasing the tax saving deduction limit in investment instruments such as ELSS, equities, longer-duration fixed deposits, tax-free bonds etc.”

Meanwhile, Chandrajit Banerjee, Director General of Confederation of Indian Industry (CII) has said that the Finance Minister should avoid taxing the super rich and on the revenue side government can increase the tax base and set the path for implementation of Goods and Services Tax apartment from accelerating disinvestment in public sector undertakings.