The Hindu : Andhra Pradesh / Hyderabad News : Finance Minister favours further reduction in tax rates

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Wednesday, Aug 01, 2007
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Andhra Pradesh

Andhra Pradesh - Hyderabad

Finance Minister favours further reduction in tax rates

P. Chidambaram for broadbased basic tax structure

Preparations on for introduction of a Goods and Services Tax from April 1
Chidambaram addresses 10th
UoH convocation

-Photo: P.V. Sivakumar

One for the album: Union Finance Minister P. Chidambaram presenting a degree certificate to a student at the 10th convocation of the University of Hyderabad on Tuesday. Beside him is Seyed E Hasnain, Vice-Chancellor of the university.

HYDERABAD: Union Finance Minister P. Chidambaram said that there should be no hesitation to further reducing tax rates in an environment of a rapidly growing economy.

“As the tax bases become wider and tax-compliance better, we should not hesitate to reduce tax rates further on the premise that revenues would be even more buoyant,” Mr. Chidambaram said addressing the 10th convocation of the University of Hyderabad (UoH) here on Tuesday.

Favouring a basic tax structure that was broadbased and oriented to low tax rates, he referred to the introduction of broadbased Value Added Tax replacing earlier sales taxes.

“Preparations have begun for the introduction of a Goods and Services Tax (GST) from April 1, 2010,” he said.

Quality production

The GST would integrate Central and States taxes on goods and services that would revolutionise indirect taxation in the country by eliminating the distorting features.

He said that to compete in international markets, there was a need to create an environment that facilitated quality production while minimising impediments to growth.

“High on the list of such impediments is the continuing use of licensing as a tool for resource allocation and physical controls as an administrative instrument,” he noted.

Mr. Chidambaram favoured selection of leading sectors of growth by offering them encouragement.

He said food processing, electronic hardware, leather products, hotels and tourism were the promising sectors.

Referring to the imperative of specialised education, he said higher education should be increasingly oriented to the needs of the economy.

More funds

Vice-Chancellor of the university, Seyed E Hasnain, said it was imperative for the Government to allocate more resources for the education sector.

Prof. Hasnain said in this convocation 1,738 students received their degrees and diplomas, including 260 M. Phils; 158 M.Techs and 212 Ph.Ds.

Honorary doctorates

Noted critic, Urdu litterateur and president of the Sahitya Akademi Gopi Chand Narang, Andhra Natyam exponent Nataraja Ramakrishna and author and critic Namwar Singh were conferred honorary doctorates.

Governor and Chief Rector of the University, Rameshwar Thakur, and Chancellor M. N. Venkatchaliah were present.

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