Economists dismayed at finance ministry release

Last Updated: Mon, Jan 07, 2013 19:42 hrs

Economists were surprised by the finance ministry’s press release which said that they suggested “higher tax rates for high income groups” in a customary pre-budget meeting in North Block.

When the content of the release was read to economists, they were surprised since they proposed just contrary to what has been written in the release. But, they did not come on quote. After consultations with Finance Minister P Chidambaram and his team, Rajiv Kumar, former director general of Federation of Indian Chambers of Commerce and Industry (Ficci), said there was a unanimous suggestion by economists that there should not be higher tax rates for the rich.

“There should not be a higher tax bracket at this point. That was opposed by every single economist,” he said.

Pulin Nayak of Delhi School of Economics said his suggestion was that the government can stay with the basic tax slabs of 10, 20 and 30 per cent. “However, we require much better enforcement and there is a need to widen the tax net,” he added.

More from Sify: