Finance minister Nirmala Sitharaman on Monday kickstarted her pre-budget consultations with industry leaders who urged her to present a growth-oriented budget for 2020-21 even if fiscal consolidation is pushed for later years. Representatives of industry also called for enhancing spending on healthcare, given ongoing pandemic.
“CII has suggested that the Budget proposals should focus on growth and alongside look at fiscal management from a three-year perspective. Aggressive disinvestment and monetisation of assets can augment government revenues at a time when tax revenues have fallen sharply,” chamber president Uday Kotak said.
Ficci suggested that the budget must prioritise growth-oriented measures and fiscal considerations should be secondary. “The need for further fiscal stimulus remains,” it said.
Assocham recommended that tax rates for individuals may be reduced keeping in mind the reduced corporate tax rates and increased surcharge on individuals.
Kotak said the government expenditure should be prioritised in three areas — infrastructure, healthcare and sustainability. “The budget proposals should also address two critical areas of boosting private investments and providing support for employment generation,” he said.
He asked for raising the cap to Rs 50,000 a month from the present Rs 25,000 a month for becoming eligible for 30 per cent deduction on emoluments paid to new employees for three years.
The CII president also called for extending the Vivad se Vishwas scheme, which would come to an end this month, by a year.
Kotak also suggested that the government should bring down its stake in public sector banks to below 50 per cent through the market route over the next 12 months except for 3-4 large lenders such as State Bank of India, Bank of aroda and Union Bank.
The government should also create government-owned, professionally managed development finance institutions to finance key sectors of the economy on the lines of KfW Germany, Brazil Development Bank and Korea Development Bank. “This could be achieved by infusing equity in NABARD for financing agriculture and rural sector, SIDBI for financing micro, small and medium enterprises and IIfCL for financing infrastructure,” Kotak said.
He said the country should move towards a competitive import tariff over three years with a lowest slab of 0-2.5 per cent on inputs on raw materials, standard slab of 5-7.5 per cent on final products and intermediary level slab of 2.5-5 per cent on intermediate goods.
Ficci suggested reducing GST slabs to three and abolition of anti-profiteering provisions under laws.
It recommended a scheme like MNREGA for urban poor which may include works like sanitation, plantation of trees, maintenance of public places etc.
It also called for interest subvention of 3-4 per cent on housing loans for a period of 3-4 years. It also urged for making employees’ contribution to employees’ provident fund voluntary, while retaining the compulsory status for employer contribution.
The chamber also suggested that infrastructure projects be expedited so that 40-50 per cent under national infrastructure pipeline be completed in the next two years.