Nitin Gadkari asks industry not to demand tax cuts perennially. Here's why

Union Minister Nitin Gadkari on Monday asked the industry not to perennially demand a reduction in taxes as the government needs funds to implement welfare schemes for the poor.

Addressing an event in New Delhi, the road transport and highways minister said the logistics cost in India will come down to 9% within two years.

"Do not ask for reducing Goods and Services Tax (GST) and taxes, it is a continuous process which is going on. If we reduce the tax, you will ask for more, because this is human psychology," Gadkari, who is known for his frank views, said.

"...we want to reduce the taxation, but without taxation also, the government can not run a welfare state," he added.

The minister added that it is the government's vision to take the tax from the rich people and give benefits to the poor.

"So the government has also got its own limits," he said.

According to the minister, presently India's logistics cost is 14-16%. "I assure you that within two years...our logistics cost will be 9%. So we will be more competitive in the international market," he said.

In China, the logistics cost is 8% and in the US and European countries, it is 12%, the minister said.

Gadkari also emphasised that India Inc. needs to reduce the cost of production without compromising the quality.

The minister noted that by increasing capital investment, India is going to create more jobs.

"You are not only wealth creator but job creator...we need to advantage of this golden era," he said.

Further, Gadkari stressed the need to reduce imports and increase exports to make India a developed nation.