NEW DELHI: In the final full budget of the Modi administration before the 2024 general elections, India’s top business leaders urged the minister of finance Nirmala Sitharaman to increase capital expenditures (Capex) to $10 trillion, rationalise personal tax rates, particularly for those in the lower end of the wealth spectrum, and prioritise job creation.
The budget for the fiscal year that begins on April 1 will be vital for addressing issues with consumer demand and job creation in the face of sluggish global growth and geopolitical uncertainty, according to lobbying groups and top business executives.
During the conference with Sitharaman as she prepares the budget for the upcoming fiscal year, businessmen along with Sanjiv Goenka, chairman of the RPSG Group, B.V.N. Rao, chairman of the GMR Group, and Naveen Munjal, M.D. of Hero Electric Vehicles, as well as officials of lobby groups, took part.
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“Our exports have already begun to suffer from the decline in global economy after a fantastic fiscal year. The external situation is probably going to be bad for a while. As a result, Sanjiv Bajaj, president of the Confederation of Indian Industry (CII) and chairman of Bajaj Finserv Ltd, remarked during the pre-budget meeting that we must broaden our economy by fostering the creation of new sectors of growth and employment.
The CII advocated placing a strong emphasis on privatisation while also expanding the revenue base by reducing GST rates and overhauling the tax collection process. The lobbying group also recommended that the budget set a greater FY24 asset monetization receipt target.
Like last year, the budget should boost capital expenditure allocation by 35%, bringing the total public capex to around $10 trillion. In order to stimulate rural demand, which is now a worry for the home economy, this must also focus on rural infrastructure, according to Bajaj. This will assist create jobs in rural areas.
Pre-budget 2023 advisory meetings continued this week, with this one being the first. The meetings with businessmen and specialists in the fields of infrastructure and climate change were presided over by Sitharaman, and participants included chief economic adviser V. Anantha Nageswaran, finance secretary T.V. Somanathan, state ministers for finance Pankaj Chaudhary and Bhagwat Kishanrao Karad, and secretaries from other departments of the finance ministry.
As global value chains realign, Assocham President Sumant Sinha emphasised the need to increase capex to stimulate private sector investment cycles. The government was encouraged to lower personal income taxes and keep the 15% corporate tax rate in place for new industrial facilities for an additional five years.
As of right now, new units that begin producing before March 31, 2024, qualify for the 15% concessional corporate tax rate.
“Personal income taxes should be decreased at all levels in order to further promote domestic demand and raise peoples’ disposable income… To promote employment, sustainable climate change, and economic growth, the 15% alternative tax regime offered to new manufacturing entities ought to be extended to both established and emerging businesses operating in key industries like logistics, renewable energy, healthcare, electric vehicles, etc., Sinha argued in his submission.
The minister of finance will meet with leaders from the financial industry, capital markets, and the agriculture and agro-processing sector on Tuesday. Later this week, in addition to experts from the social sector, such as health, education, water, and sanitation, she will also meet members of the services industry and trade organisations.
The pre-budget discussions with economists and labour union officials are set for November 28.