BUDGET 2020-21

CII has suggested rationalisation of personal income tax, measures to boost rural income and to support the real estate and housing sectors.

The moderation in nominal income growth has affected the consumption spending of the middle class. Rationalisation of personal income taxes will enhance their disposable income and thus stimulate spending. CII has recommended that the tax rate should be nil for incomes of up to `5 lakhs, 10 per cent for incomes of `5-10 lakhs, 20 per cent for incomes of `10-20 lakhs and 25 per cent beyond that.

While it may not be possible to remove the recently imposed higher surcharges on the superrich for revenue reasons, the government may consider formulating a three-year roadmap for reducing the rates, along with the removal of all deductions and exemptions.

The real estate, housing and construction sectors play a vital role in employment, rural incomes and demand generation. Therefore, resort” to provide liquidity; creating a separate classification within the systematically important NBFCs based on asset book size and supporting them with additional funding options. Some of the end use norms for ECBs raised by HFCs need to be relaxed to facilitate credit flow.

To boost rural incomes, it is critical to promote labour intensive manufacturing and construction, as these industries provide employment to the unskilled workforce, largely in rural areas. Second, farmer incomes from agriculture and livestock activities can be increased by providing better access to markets,

For revival of demand, CII has suggested rationalisation of personal income tax, measures to boost rural income and to support the real estate and housing sectors