PM hints at easier tax regime in Budget

BANGALORE: Prime Minister Manmohan Singh on Saturday indicated that the forthcoming Budget would accelerate tax reforms and continue with the process of rationalising exemptions and tax slabs. He also raised the issue of state-funding of elections at a media conference.

Winding up his first two-day official visit to Karnataka, Singh linked the growth in corruption with multiple tax slabs, exemptions and controls, which gave room for discretion to officials. Hence, keeping tax rates moderate and reducing the system of licences and controls as well as exemptions would continue, he said.

He felt the tax to GDP ratio was still skewed and needed correction. At the same time, the allocations on science, research and development remained less than 1% and urgent measures were necessary to expand R&D activities, he said hoping that the proposed knowledge commission would chart out new paths.

“The Budget will tackle some of the problems of infrastructure development in urban as well as rural areas,� he said, promising a new mechanism for urban renewal that would help not just Bangalore but other metros as well.

“Karnataka enjoys a place of pride and the Centre will work with the state government to ensure that it gets world-class infrastructure commensurate with its position,� he said.