India Inc's wishlist for Union Budget: Lower income tax, higher capex

New Delhi: India Inc on Thursday pitched for lowering income tax burden on common man, increase in capital expenditure, and firm steps to contain food inflation in their nearly two-hour long interaction with finance minister Nirmala Shitharaman ahead of the Union Budget.

During pre-Budget consultation with Sitharaman, the industry leaders and associations also urged the government to focus more on infrastructure development with a view to maintaining the economic growth momentum.

The industry leaders also laid stress on boosting the MSME (micro, small, and medium enterprises) sector, considered a backbone of the Indian economy and main employment generator.

President of industry body CII Sanjiv Puri put forth eight points for consideration for the finance minister.

These include relief in income tax at the lower end of income slabs, streamlining of employment inked incentive schemes like Production Linked Incentive (PLI), and promoting ease of doing business. CII also made recommendations for agriculture and rural development.

Recommendations of Ficci centred around capex drive, innovation and tax simplification.

During the meeting, Subhrakant Panda, former Ficci president, made a case for supporting growth momentum by energising demand, laying thrust on infrastructure development, taking further measures to rein in food inflation, supporting MSMEs and prioritising innovation and research and development in the country.

"We touched upon broader issues (like) primarily what can be done to maintain India's growth momentum and impart further impetus to it. So broadly private sector capex is picking up and the numbers are very encouraging in this regard," Panda said after the meeting.

Another leading industry body Assocham expressed confidence that the Narendra Modi 3.0 government would proceed with a strategic focus on capital expenditure, prioritising investment in infrastructure, education and healthcare in Union Budget for 2024-25.

"We welcome the government's emphasis on fiscal consolidation and believe it would proceed with a strategic focus on increasing capital expenditure. By prioritising investments in infrastructure, education, healthcare, and other critical sectors, government can stimulate economic growth while maintaining fiscal discipline," Assocham President Sanjay Nayar said.

Sanjay Kirloskar (CMD of Kirloskar Brothers), Arathi Krishna (MD of Sundram Fasteners), Vinod Aggarwal (President at SIAM), Neeraj Akhoury (President at Cement Mfrs Association), Sanjay Aggarwal (President at PHD Chamber), Samir Somaiya (President at IMC Chamber), Shefali Misra (Vice President at Biocon), and Yash Pal Sachar (Vice President at Ashok Leyland) also made several key recommendations to the minister for consideration in the Budget.

The full Budget 2024-25 is expected to be presented in Parliament next month.

Vivek Jalan, Chairman of National Fiscal Affairs and Taxation Committee of the Bengal Chamber of Commerce and Industry, suggested easing of licensing requirements for imports of electronics.

Talking to reporters, industry body PHDCCI made recommendations on several matters, including implementation of the four labour codes across the states to enhance competitiveness of the industry and strengthen university-industry linkages to enhance R&D activity in the country.

"We have suggested labour reforms for industry's progress, we want the tax (rates) to be same. We have suggested that MSME NPA timeline be extended to 180 days from 90 days at present to provide relief to the sector," Aggarwal of PHDCCI, said.

Somaiya of IMC Chamber said: "We looked at in the context of the last few years of the geopolitics, the pandemic, we have managed to steer our economy well but now to look at the future, in the context of climate change how can we have India's growth in the face of a green transition and also fueling the growth with green resources".

It was the third pre-Budget consultation by Sitharaman and senior ministry officials.

Earlier in the day, the finance minister held extensive discussions with financial sector players for the Budget. On Wednesday, she held pre-Budget meeting with economists.