New Delhi: Representatives of leading industry bodies on Thursday suggested Finance Minister Nirmala Sitharaman to boost capital expenditure for the current financial year by 25% when compared with the previous year, expand production-linked incentive (PLI) scheme and provide income tax relief in the 2024-25 union budget, which is likely to be presented in the second half of July.
In a pre-budget consultation meeting, Confederation of Indian Industry (CII) President Sanjiv Puri suggested that the “enhanced capex may be considered for deployment in rural infrastructure such as irrigation, warehousing and cold chain.”
Leading industry chambers that participated in the consultation meeting suggested that the government capital expenditure (capex) should be increased by around 25 per cent in 2024-25 when compared with the previous year’s revised budgetary estimate of Rs 9.5 lakh crore.
“The government should continue to lay thrust on public capex on physical, social and digital infrastructure,” said Subhrakant Panda, immediate past president, the Federation of Indian Chambers of Commerce and Industry (FICCI).
Highlighting the importance of simplification of the tax system, Panda said, “The Union Budget 2024-25 should continue the process of simplification and rationalisation of taxes for enhancing ease of doing business. This will also reduce tax-related litigations and improve efficiency in the taxation system.”
One of the key recommendations of the PHD Chamber of Commerce and Industry (PHDCCI) is rationalisation of direct taxes for the middle class. “The middle class must be spared from the 30 per cent tax rate and this rate must be applicable only to those with taxable income above Rs 40 lakh, this will support consumption demand in this country,” said Sanjeev Agrawal, President, PHDCCI.
Agrawal also added, “We recommend status quo on the corporate tax rate at 22 per cent for existing companies and 15 per cent for new manufacturing companies incorporated after October 1, 2019 to enhance the manufacturing share in GDP.”
Majority of the industry chambers emphasised on the need for expanding the PLI scheme.
The CII suggested that the PLI scheme should be extended to the sectors like toys, textiles & apparel, some wood-based industries like furniture, tourism, logistics, small retail, and media & entertainment. “The scheme should be designed to include MSME players in all these sectors,” CII President Puri noted. Currently, 14 sectors are covered under the PLI scheme.
Earlier in the day the finance minister also held a consultation meeting with leading experts of the financial and capital markets. During the meeting representatives of the financial and capital markets pitched for incentives for non-banking financial companies (NBFCs).
Finance Industry Development Council co-chairman Raman Agarwal requested the government to initiate a process to reduce the reliance of NBFCs on banking funds.