India Inc seeks growth-oriented budget, higher health spend from FM

Says fiscal consolidation be pushed for later years or formulated from three-year perspective

Finance Minister Nirmala Sitharaman on Monday kick-started her pre-Budget consultations with industry leaders. They urged her to present a growth-oriented Budget for 2020-21, even if fiscal consolidation was pushed for later years. Industry representatives also called for enhancing spending on health care, given the Covid-19 pandemic.

“The Confederation of Indian Industry (CII) has suggested that the Budget proposals focus on growth and alongside look at fiscal management from a three-year perspective. Aggressive disinvestment and monetisation of assets can augment government revenues at a time when tax revenues have fallen sharply,” said chamber President Uday Kotak.

The Federation of Indian Chambers of Commerce & Industry (Ficci) suggested that the Budget must prioritise growth-oriented measures, and fiscal considerations should be secondary. “The need for further fiscal stimulus remains,” it said.

The Associated Chambers of Commerce and Industry of India recommended that tax rates for individuals be reduced, keeping in mind the reduced corporate tax rates and increased surcharge on individuals. Kotak said government expenditure must be prioritised in three areas - infrastructure, health care, and sustainability. 

“The Budget proposals should also address two critical areas of boosting private investments and providing support for employment generation.”

He asked for raising the cap to Rs 50,000 a month, from the existing Rs 25,000, for becoming eligible for 30 per cent deduction on emoluments paid to new employees for three years.

The CII president also called for extending the Vivad Se Vishwas scheme by a year.

Kotak also suggested that the government bring down its stake in public sector banks to below 50 per cent through the market route over the next 12 months, except for three to four large lenders, such as State Bank of India, Bank of Baroda, and Union Bank.

The government should also create government-owned, professionally managed finance institutions to finance key sectors of the economy on the lines of KfW Germany, Brazilian Development Bank, and Korea Development Bank.

"This can be achieved by infusing equity into National Bank for Agriculture and Rural Development for financing agriculture and rural sector, Small Industries Development Bank of India for financing micro, small and medium enterprises, and India Infrastructure Finance Company for financing infrastructure,” added Kotak.

He said the country should move towards a competitive import tariff over three years with the lowest slab of 0-2.5 per cent on inputs on raw materials, standard slab of 5-7.5 per cent on final products, and intermediary level slab of 2.5-5 per cent on intermediate goods.

Ficci suggested reducing goods and services tax slabs to three, and sought abolition of anti-profiteering provisions under laws.

It recommended a scheme like Mahatma Gandhi Employment Guarantee Act for the urban poor, which may include works like sanitation, plantation of trees, maintenance of public places, etc.