New Delhi [India], December 30 (ANI): In the pre-budget meeting with Finance Minister Nirmala Sitharaman on Monday, representatives from various industry bodies put forward a bouquet of suggestions before the government.
Today was the fifth pre-budget consultation with industry representatives.
Sanjiv Puri, president of Confederation of Indian Industry (CII), post the meeting said, they discussed ways to provide impetus to sectors that are labour intensive, in particular the MSMEs. Besides, they discussed ways and means to boost consumption in the economy.
Sanjiv Puri noted that the government reiterated that the focus would be on public investment while maintaining the fiscal glide path.
“To build on this strong foundation, we discussed several suggestions which are to do with providing impetus to sectors with high labour-intensive components, providing impetus to MSME, integrating India with the Global Value Chain, and how to boost consumption. The government reiterated that the focus on public investment with a fiscal glide path should continue,” Puri said.
Asserting that continued focus on capex and fiscal consolidation will have a multiplier impact on the economy, CII suggested a 25 per cent ramp-up in capex spending over the Rs 11.1 lakh crore budgeted in 20214-25.
The enhanced focus should be on rural infrastructure, including irrigation, CII said. In order to boost consumption, it sought a reduction in excise duty on fuel.
Moving on, PHDCCI’s suggestions focused on rationalizing the tax structure, bolstering the manufacturing sector, and creating an enabling environment for Micro, Small, and Medium Enterprises (MSMEs) to thrive along with significant reduction in costs of doing business.
Given high contributions of MSMEs to the economy, PHDCCI called for technology-enabled manufacturing.
PHDCCI sought from the government a fund so that MSMEs could tap it and raise their technology-intensive production.
Ranjeet Mehta, CEO and Secretary General, told ANI they have suggested before the government for a green transition fund.
On the personal taxation front, PHDCCI urged the government to tweak it. They suggested a 30 per cent tax on over 50 lakh annual income, and a 20-25 per cent window for Rs 15-50 lakh.
“These (tweaking) will raise consumption,” Mehta said.
Industry body ASSOCHAM, in its pre-budget meeting with Finance Minister, has sought a slew of measures to encourage investment.
According to ASSOCHAM President Nayar Sanjay Nayar, stressed the need to establish MSME universities to promote skill development and entrepreneurship training as well as to foster growth within the sector.
Nayar added that despite the policy for collateral-free loans, MSMEs still face challenges in accessing credit. Banks often request personal property collateral and charge higher interest rates, hindering credit access.
He asserted that it must be made mandatory for banks to disclose the number and amount of collateral-free loans granted periodically. He suggested that the upcoming Budget provide an additional allocation or net to enhance credit flow to the MSMEs, much like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) launched during COVID, which proved to be a lifeline driving the growth of MSMEs.
The Finance Ministry conducts several pre-budget consultation meetings annually with experts, industry leaders, economists, and state officials. The formal exercise to prepare the annual Budget for the next financial year has already begun.
Finance Minister Nirmala Sitharaman has so far held a series of meetings with various stakeholders, including with MSMEs, farmers’ associations, and economists.
Prime Minister Narendra Modi also interacted with a group of eminent economists and thought leaders in preparation for the Union Budget 2025-26 at the NITI Aayog premises last week.
As is the convention, the Budget for 2025-26 will be tabled on February 1, 2025.
The 2025-26 Budget will mark Finance Minister Nirmala Sitharaman’s eighth. All eyes will be on the key announcements and the government’s forward-looking economic guidance for the remainder of the Modi 3.0 tenure. (ANI)
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