The upcoming Union Budget should bring down the taxes - both income tax as well as corporate tax - to give a boost to consumption and investment that has been severely hit by demonetisation, a top industry body said on Monday.

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"In the budget, it is important to bring down the individual tax and corporate tax rates so that money is there in hands of people for consumption and investment," Sunil Kanoria, President of Assocham, said in an interview with BTVi.

"Private investments have not happened. Substantial reduction of tax rates will attract growth rate," he added.

While labelling the shortage of cash as shortlived, he said that the remonetisation was progressing well.

"It may take maximum 1-3 months. Reserve Bank of India has indicated that by March everything will be normal. I think it will be so earlier. The need for cash will reduce and I am not worried about it," he said.

Analysing the key takeaways from Prime Minister Narendra Modi's New Year Eve speech, Kanoria said that the he has tried to provide some relief and support post the challenges bought into the economy as a result of demonetisation.

Welcoming the announcements made by Modi of interest subvention on housing for the urban and rural poor, enhanced credit guarantees to small traders and micro, small and medium enterprises (MSMEs), 60-day interest waiver on select farm loans, he said: "These are positive moves to support the weaker section that got impacted in demonetisation."

"We saw banks reducing the interest rates substantially, particularly the State Bank of India. The passing off of the interest rates will go a long way in kicking the consumption and investment cycle," he added.