Simplification and reduction in personal income tax rates and harmonisation of customs duties to global levels in a bid to boost economic activities were favoured by economists at a meeting chaired by Prime Minister Narendra Modi at Niti Aayog.
The meeting, which comes ahead of the Budget slated to be held in early February, did not go into the impact of demonetisation on the economy while the aspect of digitisation to make it a less cash economy figured.
"Tax simplification figured quite a lot...on the direct taxation, both corporate and personal income tax on simplifying, reducing exemptions, bringing down tax rate and aligning tax system to make India competitive with international destination," Niti Aayog Vice Chairman Arvind Panagariya told reporters.
He was briefing the reporters about the outcome of the meeting on "Economic Policy The Road Ahead".
About the inverted duty structure, it was suggested to harmonise the tariffs to resolve the issue.
"One of the issues that came up (for discussion) was tariff inversion whereby tariff on component and inputs are higher than the final products so that undercuts the incentive to produce the final product," Panagariya said.
"So the suggestion (on this issue) was to harmonise the tariff to single rate to 7 per cent or so," he added.
Besides, suggestion was made for listing of PSUs and increase use of Direct Benefit Transfer (DBT) to subsidy expenditure.
Farm sector experts suggested incentivising states to undertake market reforms, create corpus fund for promoting farm mechanisation and micro irrigation, and provide interest subvention for term loans so that income of farmers are doubled by 2022.
Experts also suggested that there is a need to invest in the tourism sector which has potential to generate high paying job and making Indian universities world class.
Pulak Ghosh IIM Bangaluru professor said that India need to collect large volumes of data so that data driven policy can be formulated.
Among others, the meeting was attended by Finance Minister Arun Jaitley, Panagariya and various other senior officials from the Union Government and Niti Aayog.
The economists and experts who were present include Pravin Krishna, Sukhpal Singh, Vijay Paul Sharma, Neelkanth Mishra, Surjit Bhalla, Govinda Rao, Madhav Chavan, N K Singh, Vivek Dehejia, Pramath Sinha, Sumit Bose and T N Ninan.