The government has also asked ICRIER and NIPFP to do a study on tax exemptions, says Revenue Secretary K M Chandrasekhar.
The government is working towards widening the tax base in the country and looking at tax exemptions from the financial year 2007-08.
"There may be some case for lowering of indirect taxes and spreading the taxation base evenly, while ensuring that the interest of all sections are safeguarded," said revenue secretary K M Chandrasekhar on the sidelines of the India Economic Summit 2006.
The Indian Council for Research on International Economic Relations (ICRIER), along with the National Institute of Public Finance and Policy (NIPFP), is doing a study on tax exemptions.
Further, a team of tax department officials, in conjunction with the Institute of Chartered Accountants of India (ICAI) are looking at the Income Tax law, added Chandrasekhar.
Earlier, speaking at a session on India's competitiveness an growth prospects, Chandrasekhar said that the country needs to allocate funds for the development of physical and social infrastructure in a way that reduces regional imbalances.
"There is a huge divide between the level of social and economic development between different states," he said, adding that the Twelfth Finance Commission has recommended a higher allocation for developing social infrastructure in backward states.
Further, the Department of Industrial Policy and Promotion (DIPP) is working on evolving a policy for the North-Eastern states that would focus on investment in these states.
In his comments, Rajiv Kumar, chief executive officer of ICRIER, said: "It is appreciable that the centre of action has moved from the Union to the states and the latter are now trying their best to attract huge investments by offering conducive infrastructure and tax incentives."
"States like Uttaranchal and Himachal Pradesh are emerging as states with huge investment potential. These could be a case for study by other states," said Sunil Kant Munjal, chairman of Hero Corporate Service.