June 20th 2024.
On Thursday, the Finance Minister Nirmala Sitharaman chaired the third pre-budget consultation with industry leaders and associations for the upcoming General Budget of 2024-2025 in New Delhi. This meeting was also attended by Union Minister of State for Finance, Pankaj Chaudhary, along with other prominent officials from the finance department. The Confederation of Indian Industry (CII), a leading business chamber, has presented its wish list for the Union Budget, urging the government to maintain the current corporate tax rates to provide tax certainty for businesses.
Furthermore, CII has also proposed the removal of Section 56, also known as the Angel Tax, in order to promote innovation and startups. According to CII, this step would greatly aid in capital formation for the startup sector. Currently, in order to be eligible for angel tax exemption, startups must meet certain conditions, which the industry claims are cumbersome and hinder the flow of investments.
CII has also put forth proposals for indirect taxation, requesting the removal of restrictions for availing input tax credit. They have also suggested that the power sector be brought at par with the coal pricing, allocation, and transportation for the construction of properties used for providing output services. In addition, they have emphasized the need to phase out cross-subsidization of railway passenger fares by freight, in order to reduce logistics costs for businesses.
During the pre-budget consultation meeting, Subhrakant Panda, the Immediate Past President, highlighted the importance of simplifying the tax system. He emphasized the need for the Union Budget to continue the process of simplification and rationalization of taxes to enhance ease of doing business and reduce tax-related disputes. He also stressed the importance of supporting the growth momentum by focusing on infrastructure development, controlling food inflation, and prioritizing innovation and research & development in the country.
In its pre-budget memorandum presented to the Finance Minister, the PHD Chamber of Commerce and Industry emphasized the need for calibrated steps to enhance domestic sources of growth in order to maintain a higher economic trajectory. They suggested that the budget should focus on stimulating the manufacturing sector and increasing its contribution to GDP beyond 25%. They also proposed expanding the production-linked incentive scheme to include sectors such as medicinal plants, handicrafts, leather and footwear, gems and jewelry, and the space sector.
In conclusion, the industry bodies have presented their proposals and suggestions to the Finance Minister, urging the government to prioritize growth and development in various sectors for the upcoming Union Budget. These measures, if implemented, could have a significant impact on the economy and help in achieving the country's growth targets.
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