India Inc on Tuesday urged finance minister Pranab Mukherjee not to raise excise duties and services tax from the current 10 per cent level and stick to the peak customs duty of 10 per cent in the forthcoming Union Budget for 2011-2012 so that the industry can sustain the growth momentum of the economy.

India Inc also sought a reduction in corporate tax from 30 per cent to 25 per cent and the abolition of surcharge and cess so that more funds are released for investment.

"However, the finance minister (FM) is not in a mood to cut taxes because it will affect fiscal deficit targets... It appears that FM has at least agreed to continue with stimulus packages," Videocon chairman Venugopal Dhoot said.

The Federation of Indian Chambers of Commerce and Industry (Ficci) president Rajan Bharti Mittal said, "We have asked to maintain excise duty at the current level.

Let the interest rate not harden up because industry is in investment mode so that those investments do not become unviable."

A delegation of the Confederation of Indian industry (CII), led by its president Hari Bhartia, also met the finance minister with the same demand. India Inc is worried that a further hike in these duties could choke growth at a time when rising inputs costs, tight liquidity conditions, rising interest rates and slow recovery of the developed economies pose a downside risk to growth.

"FDI (foreign direct investment) in multi-brand retail should be opened up as this is a capital-intensive sector and the entry of foreign players will lead to greater competition. Similarly, higher FDI should be allowed in the defense sector," Bhartia said.

Mukherjee told industrialists that the government is conscious of two major concerns relating to the pace of development of infrastructure and investments in research and development (R&D). This appears to be an indication that the budget will carry incentives for these two segments.