As part of ongoing pre-budget conversations with various industry stakeholders, Union Finance Minister Nirmala Sitharaman met with capital market experts and industry associations in two sessions on Thursday.
Experts in capital markets, non-banking finance companies and asset management companies attended the morning session.
Suggestions were made on increasing allocation of funds to Small Industries Development Bank of India and National Bank for Agriculture and Rural Development, according to Raman Aggarwal, director, Finance Industry Development Council. This will aid the refinancing of NBFCs, owing to the growth in the sector's credit, and limit the overdependence on banks flagged by the central bank, he said.
NBFCs also sought clarity on GST demand on co-lending and the payment of GST on the service fee, Agarwal said, while adding that discussions led by asset management companies included the topic of GIFT City and how capital can be retained in India.
Some players pitched for deepening the market and providing some tax incentives, said George Alexander Muthoot, managing director of Muthoot Group.
Arun Kohli, MD and country head of Morgan Stanley, told media that discussions also included industry topics like removal of Securities Transaction Tax, simplification of the capital gains tax structure and the transaction tax on F&O trading.
The industry is of the view that the pace of divestment should increase while consistency in tax policy and continuity in policies should remain, he said.
Earlier this week, industry associations met separately with the Revenue Secretary to submit their recommendations.
Industry Bodies Pitch For Tax Sops
Union Minister for Finance & Corporate Affairs Smt. @nsitharaman chairs the third Pre-Budget Consultation with industry leaders and associations in connection with the forthcoming General Budget 2024-25 in New Delhi, today.
The #PreBudget consultation meeting was also attended… pic.twitter.com/WLg6eJJFyNThe government should increase capex spend by 25% over the FY24 revised estimate of Rs 9.49 lakh crore, and a high-powered expert group may be set up to review the FRBM Act, said Sanjiv Puri, managing director of ITC Ltd. and president of the Confederation of Indian Industry.
The body has also suggested that federal structures, like the GST Council, could be set up for key reforms in land, labour, power, agriculture and fiscal sustainability. To boost consumption, relief in income tax at the lower end of income slabs, an upward revision of MGNREGA minimum wages and an increase in the direct benefit transfer amount in schemes, such as PM Kisan, were also recommended by CII.
Speaking to NDTV Profit after the meeting, Samir Somaiya, president of IMC Chamber of Commerce and Industry, said that conversations included maintaining the growth momentum in a sustainable way.
“Discussions included green transition and adaptation and mitigation of climate change, while fuelling growth with green resources,” he said.
The PHD Chamber of Commerce and Industry said that the government should expand the PLI scheme beyond the 14 sectors to include medicinal plants, handicrafts, leather and footwear, gems and jewellery, and the space sector, among others, while also placing an ask for the implementation of the four labour codes.
The PHD Chamber of Commerce also recommended changing the classification norms of MSMEs for NPAs and to cover medium enterprises in the MSME Facilitation Councils for settlement of delayed payments.
Meanwhile, the Federation of Indian Chambers of Commerce and Industry also recommended the government should continue its thrust on public capex on physical, social and digital infrastructure in the upcoming Union budget, including a 25% increase in capex.
Simplifying tax deducted at source provisions and capital gains tax regime, particularly having two to three broad buckets of different types of assets, long-term holding period for such assets, indexation benefit eligibility, and bringing long-term and short-term capital gains tax rate for such assets without distinction between residents and non-residents, were also among FICCI's suggestions.
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