Finance Ministry officials make a hue and cry over the need to abolish exemptions from the tax system.
One should not forget that the success of the IT Industry was greatly aided by the various tax exemptions given to them.
If the manufacturing sector, especially the medium and small scale industries, was given the same kind of income-tax and excise exemptions, it would have charted a different course altogether.
The Small Scale Industry (SSI) exemption for central excise for Rs 1 crore is, in fact, a disincentive to grow.
Hence, there is a definite case to increase the SSI exemption to Rs 6 crore.
Exemptions are not subsidies. In fact, the right exemptions will provide an impetus to the economy and create more jobs. Widening the tax base and bringing evaders into the tax net should be a bigger priority than abolishing valid exemptions.