Various economists told Prime Minister Narendra Modi and his Cabinet in the pre-Budget meeting that the Central government should focus on issues such as generating jobs, fixing agricultural distress and maintaining fiscal consolidation, Business Standard reported.
Along with prime minister, Finance Minister Arun Jaitley and other Cabinet ministers, the meeting was attended by various economists and social experts.
The economists further suggested that government follow the fiscal consolidation roadmap even if the corporate tax is reduced from the current rate of 30 percent.
They also preferred re-introduction of the long-term capital gains (LTCG) tax on listed securities and mutual funds.
Currently, equities, preference shares or equity-linked mutual fund (MF) schemes for an investment of less than 12 months attract a short-term capital gain (STCG) tax of 15 percent besides surcharge and cess. Meanwhile, gains on equity investment beyond 12 months are exempted from taxes if the securities transaction tax (STT) is paid on the sale transaction.
Market participants believe if the government brings in LTCG tax on equity investments, it would be negative for investors.
The economists also favoured the idea of extending the holding period of STCG tax from one year to three years, reported the business daily.
Jaitley is scheduled to table the Union Budget for the financial year 2018-19 on February 1.
On the agricultural front, the experts suggested that the Central government create more jobs in rural areas, change the crop geometry, and improve linkage of farmers to markets.
"We made a suggestion that there is no reason why there should be a distortion in the choice between long-term capital gains on debt-based assets and equity-based assets," BS quoted economist and former member of the Prime Minister's Economic Advisory Council M Govinda Rao as saying.
Quoting sources, BS also reported that employment and the need for high-frequency data on employment was another major talking point in the meeting.