This is what we want, industry tells Nirmalaji

December 31, 2024 10:42

Sanjiv Puri, chairman, CII

Tax exemption for the middle class, reduction in excise duty on fuel, and continued push towards public capex were some of the key suggestions made to the finance ministry during pre-Budget discussions with industry representatives on Monday.

The fifth round of consultations on the upcoming Budget with Finance Minister Nirmala Sitharaman and top government officials focused on employment generation. It also talked of steps to spur consumption in the economy besides a push for factor market reforms to boost growth.

Prominent industry associations such as the Confederation of Indian Industry (CII) and the Associated Chambers of Commerce and Industry of India (Assocham) have called for granting infrastructure status to the hotel and tourism sector.

This, they said, will help the hospitality sector attract foreign investment and reduce borrowing costs. This, in turn, would enhance employment opportunities across the country.

Speaking to reporters, Sanjiv Puri, chairman, CII, said the government should take steps to increase disposable income to drive higher consumer spending and stimulate economic growth.

Advocating for economic relief for the middle class, Puri said, "Industry has proposed tax exemptions for individuals earning up to Rs 20 lakh annually. Reduction in excise duties on petrol and diesel could alleviate the financial burden on consumers and businesses alike."

Puri stressed the need to increase the minimum wage rate under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) from Rs 267/day in FY24 to Rs 375. This was suggested by the Expert Committee on Fixing National Minimum Wage. Industry representatives said that given the uncertainty due to persisting global headwinds, the government's thrust on public capex on physical, social and digital infrastructure will be crucial to maintain the growth momentum.

Ficci Vice Chairman Vijay Sankar said, "Quality of the fisc has improved over time with revenue expenditure being contained and productive capital expenditure being prioritised. We propose the government consider increasing capex in FY26 by 15 per cent over 2024-25."

The government, he said, must rationalise the multiple tax deducted at source (TDS) and tax collected at source (TCS) rates by converging them into a simple two or three-tier rate structure. This is to avoid classification disputes and prevent blockage of working capital in the industry.

Stop the practice of imposing TDS/TCS on transactions that are subject to goods and services tax (GST) since the relevant information is already available through GST filings, he said.

Besides tax reforms, Sankar called for an enabling policy framework that can target resources towards both green areas as well as transition areas in order to meet the goal of net zero by 2070. The industry has sought abolition of the securities transaction tax (STT), arguing that such a move would encourage investment in the capital markets.

Assocham President Sanjay Nayar proposed extending the scope of presumptive taxation to micro, small and medium enterprises (MSMEs) and emerging sectors like data centres and Cloud computing.Presumptive taxation is a simplified tax system where small businesses pay tax based on a presumed percentage of their gross receipts instead of detailed accounting of actual income.

This move aims to simplify tax compliance, reduce disputes, and aid financial planning for businesses.

-- Monika Yadav, Ruchika Chitravanshi/Business Standard

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This is what we want, industry tells Nirmalaji

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