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ASSOCHAM pitches for growth rate of 8-8.5% per annum

In order to make India a $5 trillion economy by 2025, Industry body Associated Chambers of Commerce and Industry of India (ASSOCHAM) has come out with charter of demands and called on political parties to incorporate the same in their Lok Sabha poll manifestos. It wants political parties to pledge, among other steps, to enable growth rate of 8-8.5% per annum. Some of demands that Assocham wants political parties to incorporate in their 2019 election manifestoes include simplification of Goods and Services Tax (GST) structure, time bound dilution of government stake in Public Sector Undertaking (PSUs), providing tax rebate of 1% to companies that offer over 20% jobs for women and cut in corporate income tax for Micro, Small & Medium Enterprises (MSME) sector.

ASSOCHAM further suggested expeditious roll-out of Ayushman Bharat and reducing education cost by minimising GST on outsourced education services from 18% to 5%. It has recommended creation of development finance institutions to provide long term non-bank funding option to the industry to boost economic growth and investment. To improve farmers' income, it suggested the exemption of GST on leasing services for farm equipment and machinery, as well as creation of Technology Up-gradation Fund (TUF) for agriculture to provide capital subsidy. In order to boost manufacturing, it has pitched for gradual simplification of GST structure aiming for dual rate slab 8% and 16%.

The industry body has also recommended reduction in the corporate income tax to 15% from present 25% for the Micro, Small and Medium Enterprises (MSME) over a period of 5 years and 20% from present 30% for large companies over a period of 5 years. Among other steps, it has suggested taxing income from renting of housing properties at a flat rate of 10%, deduction from rental income under Section 24(a) to be increased from 30% to 50% to improve Rate of Return from renting. It recommended exemption of long term capital gain on securities held for 3 years and more and an additional 50 lakh limit be given under Section 54EC for investment in CPSE ETFs bond market.

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