New Delhi, Jun 20 (UNI) Ahead of union budget, industry chamber FICCI on Thursday emphasized the need to continue supporting the growth momentum by energizing demand, laying thrust on infrastructure development, taking further measures to rein in food inflation, supporting MSMEs and prioritizing innovation and research & development in the country.
“We look forward to a prudent budget that builds upon the strengths of Indian economy for accelerated growth and remains committed to fiscal consolidation,” FICCI said in a release.
The Union Budget, being the first major public policy announcement of the government, is expected to set the tone for the next five years in terms of government’s policy direction, Mr Subhrakant Panda, Immediate Past President, FICCI said.
Highlighting the importance of simplification of the tax system, Mr said, the Union Budget 2024-25 should continue the process of simplification and rationalization of taxes for enhancing ease of doing business. This will also reduce tax related litigations and improve efficiency in the taxation system.
He further added that there is a need to keep an eye on global developments in the current uncertain times to ensure that the Indian industry is not impacted adversely.
FICCI’s specific recommendations for the Union Budget 2024-2025 include – maintain thrust on investments. The government should continue to lay thrust on public capex on physical, social and digital infrastructure in the upcoming Union Budget. The capital expenditure outlay for FY25 should be increased by 25 percent over RE for FY24 to Rs 11.8 lakh crore.
Prioritise innovation and research and development, it said and asked the Government to operationalise the Rs. 1 lakh crore corpus announced in Interim Union Budget for research and innovation in sunrise sectors by ensuring that TRL 2-4 level research is taken up to innovations with TRL 8-9 implementation levels, so that ideas are developed into cash-flow.
FICCI desired continuation of simplification of the tax regime. Simplify TDS provisions – To further enhance the ease of doing business, the government should consider laying down a roadmap for rationalization of TDS rate structure.
It is suggested that there be only three rate structures for TDS payments – TDS on salary at slab rate, TDS on lotteries/online games etc. at maximum marginal rate and two standard rates for TDS for different categories.
Simplification of the TDS rate structure will considerably ease the compliance burden on the taxpayers and avoid litigation due to characterization disputes.
Simplify capital gains tax regime in terms of two or three broad buckets of different types of assets, holding period for such assets to turn long term, indexation benefit eligibility, LTCG tax rate and STCG tax rate for such assets without distinction between residents and non-residents. Indicative broad buckets could be (a) Equity instruments (b) Debt instruments and (c) Other assets.
It suggested an introduction of a new independent Dispute Resolution Forum for effective and time bound dispute resolution.
Initiate GST 2.0 reforms, with fewer GST tax slabs (max 3), inclusion of hitherto excluded sectors, and revamp of GST law to have minimal friction in achieving pass through of all input tax credits in the entire value chain, FICCI said.
It also suggested to keep thrust on improving exports by way of revising rates of duty drawback, RoDTEP to make Indian exports competitive while ensuring that the revised rate structure is WTO compliant. Increase cross-border paperless trade by implementing electronics exchange of customs declarations, electronic exchange of certificate of origin, electronic certificates related to SPS, etc.
Strengthening agri-ecosystem and boost agri-productivity is equally important, it said and suggested the government to launch an agricultural yields mission for bottom 100 districts on the lines of aspirational districts.
Provide acceleration to Tourism by way of granting infrastructure status to ‘tourism’ projects with capex above INR 50 Cr and create a ‘Tourism Development Fund’ co-financed by the Centre and States to support creation of ancillary infrastructure in and around new destinations/remote districts.
Addressing food inflation is the core issue and to mitigate food inflation, resolute action backed with hard data is required at multiple points and among multiple stakeholders. We believe this can be done only with an efficient structure, backed by the authority of the PMO.
“We suggest a Food Inflation & Response Strategy Team (FIRST) to create an e-enabled, empowered coordination framework which can work with and across multiple key governmental agencies, to proactively address food inflation through logistical strategies in the short term. In the long-term learnings can be captured to form the basis of agricultural production and distribution planning for supply side management of inflation,” FICCI said.
