NEW DELHI: The industry has sought increased capex allocation for rural infrastructure and tax reforms to boost consumption in the upcoming Union Budget. The suggestions were a part of the pre-Budget consultations of India Inc with the Finance Minister Nirmala Sitharaman held on June 20.
“We recommend continued focus on capex and fiscal consolidation with an increased capex spending by 25 per cent over the revised estimate of FY24 at Rs 11.8 lakh crore. The enhanced capex may be considered for deployment in rural infrastructure such as irrigation, warehousing and cold chains,” Sanjiv Puri, President CII (Confederation of Indian Industry) told Sitharaman.
The interim Budget has set the capex allocation at Rs 11.1 lakh crore for FY25 against the revised estimate of Rs 9.49 lakh crore in FY24.
While the government would adhere to the fiscal glide path of bringing down the fiscal deficit to 4.5 per cent of GDP by FY26, a high-powered expert group may be set up to review the Fiscal Responsibility and Budget Management (FRBM) Act, Puri said.
Tax reforms
“In order to boost consumption, immediate measures to put more money in the hands of people, especially in the lower income brackets may be considered. Relief in income tax, at the lower end of income slabs is suggested,” he said.
An upward revision of MNREGA minimum wages and increase in Direct Benefit Transfer amount in schemes such as PM KISAN was also suggested as a part of the pre-budget consultations.
“The Union Budget 2024-25 should continue the process of simplification and rationalisation of taxes for enhancing ease of doing business. This will also reduce tax related litigations and improve efficiency in the taxation system,” Subhrakant Panda, Past President, Federation of Indian Chambers of Commerce and Industry (FICCI) told the Finance Minister.
The industry also suggested simplification of capital gains tax regime in terms of two or three broad buckets of different types of assets like equity and debt instruments.
Correction of inverted duty structure in customs duty for textiles, aluminum and chemicals was also suggested. The industry also sought GST reforms, with fewer tax slabs and inclusion of excluded sectors.
Employment
CII suggested an Employment Linked Incentive scheme for labor intensive sectors like toys, textiles, furniture, tourism, logistics, small retail and media & entertainment.
“The scheme should be designed to include MSME players in all these sectors and there could be a higher benefit for the women labor force. PM SVANidhi Yojana could be considered for extension beyond December 2024 and expanded to rural and semi-urban areas,” Puri said.
Ease of doing business
India Inc sought continued focus on decriminalisation of business laws, especially for the small and medium sector. It also suggested time-bound approvals under the National Single Window System for setting up a new business and for winding up of an existing business.Agri and rural development
“We suggest launching an agricultural yield mission for the bottom 100 districts on the lines of aspirational districts. A national program for developing farm technicians over next five years to provide new technologies and services to farmers such as soil testing, micro irrigation, drones, sensors, farm machinery, post-harvest technologies as well as operation and maintenance of in-village water supply systems can be launched. A research and development network can be created through collaboration between private sector and government agri-research institutions to develop climate-resilient seeds and precision farming technologies,” Ficci said.
