The Finance Minister, Pranab Mukherjee, today kick-started his pre-Budget consultations and met with the titans of the industry. The industry came out with its wish-list and made a slew of demands tax breaks, individual tax exemptions to the limit of Rs 2 lakh.

This was part of the pre-Budget consultations that the Finance Minister routinely conducts with captains of India Inc. Predictably, this was about industry wanting tax breaks.

The industrys wish-list is that it wants a reduction in the corporate tax rate down to about 25%, increase in the threshold for income tax exemption to about Rs 2 lakh, restore export exemptions profit tax exemptions which is Section 80HHC, and a plethora of other such exemptions.

The industry understands the fact that this is a year that the government is constrained for fiscal headspace. So, their solution to the government is: go ahead, disinvest, let it be an expenditure- or investment-led Budget, and also ensure that your expenditures are trimmed and to target your subsidies properly and just ensure that at the end of the day industry remains competitive.

But if you juxtapose that in the context of what the agriculturists who also met the FM earlier in the day by whose name the government swears and also indulges in a little bit of protectionism, they went ahead to say that we have got no problems with opening up agricultural foreign direct investment. Corporate India, on the other hand, wants a little bit of protection even in these hard-pressed times, a lot of tax breaks while the agriculturists say: open it up.

A dilution of the Fringe Benefit Tax (FBT) may also be on the cards an internal assessment in the ministry says that in terms of the cost benefit analysis, the costs are involved in administering such a tax is actually disproportionate to the levies Rs 8,000 crore is just 2% of the direct tax revenues.

There is a lot of criticism from corporate India that the designing of FBT is flawed. The case has been made by corporate India today to the Finance Minister. One may have to see how much of that dilution actually happens when the Budget is announced.