Rationalise non-priority expenditures in FY24: CII
NDUSTRY LOBBY OUTLINES FOURPOINT AGENDA TO RE-ENERGISE GROWTH IN THE ECONOMY
NEW DELHI: The Confederation of Indian Industry (CII) has proposed a four-pronged approach to re-energise growth in the upcoming Union Budget – revitalise consumption, lay a credible road map for fiscal consolidation, push for manufacturing, and boost exports – while suggesting to the government to curtail “non-priority” expenditures such as fuel and fertiliser subsidies.
While presenting its pre-budget memorandum to the Union finance ministry, CII “outlined a four-point agenda to re-energise growth” in the economy and “stressed on the need for revitalising the investment as well as consumption demand to infuse vibrancy” in the economy, the industry association said in a statement.
“For reviving investment, the memorandum recommends raising capital spending to 3.3-3.4% of GDP (gross domestic product) in FY24 from 2.9% currently with an aim to increase it further to a 3.8-3.9% by FY25,” it said. It also suggested increasing outlays on green infrastructure like renewables along with traditional infrastructure such as roads, railways, and ports. In addition, full implementation of Gati Shakti and ₹111-lakh crore National Infrastructure Pipeline (NIP) should be expedited to bring in efficiency in infrastructure creation, it added.
Quoting CII president Sanjiv Bajaj, the statement proposed further easing in tax administration and said the government should contemplate a reduction in the rates of personal income tax in its next push for reform to increase disposable incomes and revive the demand cycle.
CII said tax certainty for businesses and corporate tax rates should be maintained at the current levels and called for further decriminalisation of civil offences.
No arrests or detention should take place in civil cases unless criminalisation in business has been proved beyond doubt, it added.
For raising consumption demand, the association proposed rationalising income tax slabs and rates for individuals, reducing 28% Goods and Services Tax (GST) rate on select consumer durables, and expediting rural infrastructure projects for facilitating employment generation in the hinterland.
Stressing on the need for fiscal consolidation, it suggested the government to draw “a credible road map” and announce the same in the budget, which would gradually bring down fiscal deficit to 6% of GDP in FY24 and to 4.5% by FY26.
It also underscored the need to meet disinvestment targets and expenditure rationalisation. It suggested to curtail “non-priority expenditure by rationalising subsides such as fuel and fertilisers” as “non-merit subsidies comprise a staggering 5.7% of GDP” of which 1.6% is from the Centre and 4.1% from the states. “This is clearly unsustainable,” it added.
CII is expected to join finance minister Nirmala Sitharaman’s pre-budget consultations on Monday, one person aware of the development said, who wished not to be named.
FM is holding pre-budget consultations with various stakeholders starting from November 21, which is expected to end next week on Monday, according to a finance ministry’s tweet.
“The meetings will be held virtually,” it said.