The Confederation of Indian Industry, in its budgetary recommendations, has pitched for a reduction in personal income tax to revive the demand cycle and increase disposable income in the hands of the public.
"A fresh look is needed at the capital gains tax with respect to its rates and holding period to remove complexities and inconsistencies...," said Sanjiv Bajaj, president, CII.
To facilitate the rise in consumption demand, the industry body suggested rationalising income tax slabs and rates for individuals, reducing the 28% GST rate on select consumer durables, and expediting rural infrastructure projects to bolster employment generation.
As is customary, industry bodies present pre-Budget memoranda to the Ministry of Finance in the run-up to the budget.
The CII has prioritised reviving consumption, demand, and investment in its agenda. In order to revive investment, it has recommended raising capital spending to 3.3-3.4% of GDP in FY24 from the current 2.9% and to 3.8-39% by FY25. Actual capital expenditure in the current budget was Rs 7.5 lakh crore.
Increased spending on green infrastructure, such as renewables as well as traditional infrastructure such as roads, railways, and ports, as well as full implementation of Gati Shakti and National Infrastructure Pipeline, were also suggested.
Other Key Recommendations:
Maintain corporate tax rates at current levels.
Deepen corporate bond markets, including infrastructure bonds and urban municipal bonds for financing infrastructure plans.
Meet the disinvestment target to bring pace to PSU privatisation. (current years' disinvestment target is at Rs 65,000 crore).
Rationalising subsidies such as fuel and fertilisers (current year's extra budgetary spend is over Rs 3 lakh crore).
Improve the ease of doing business through further digitisation, faster and time-bound clearance, contract enforcement, an alternate dispute redressal mechanism, and a single-window system for central and state clearances.
Credit-linked capital subsidy for technology upgradation for MSMEs.
Shift import duty slabs to a competitive level and cover all the export products, including the EOU and SEZ units, under the Remissions of Duties and Taxes on Exported Products Scheme.
Extend the sunset date for commencing manufacture under Section 115BAB of the Income Tax Act till March 31, 2025.
Set up the GST Appellate Tribunal and the National Authority for Advance Ruling, on priority.
Introduce a GST amnesty scheme to cover procedural and minor issues initially faced by taxpayers and decriminalise GST law.
The finance minister will be holding a series of pre-Budget consultations with various stakeholder groups from Nov. 21 till Nov. 28. Sitharaman will meet industry bodies and stakeholder groups related to climate change and infrastructure on Monday.
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