The group of economists suggested to the ministry that the focus should be on reducing the fiscal deficit in the upcoming budget, adding the issue of the need to generate employment growth…reports Asian Lite News
The Finance Ministry concluded the Pre-Budget consultations for the Union Budget 2024-25, which began on June 19, 2024.
These meetings were chaired by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman. The Ministry of Finance stated that over 120 invitees from 10 stakeholder groups participated in the in-person consultations.
Among these stakeholders, the experts and representatives from farmer associations and agriculture economists, trade unions, the education and health sectors, employment and skilling, MSMEs, trade and services, industry, economists, the financial sector and capital markets, as well as the infrastructure, energy, and urban sectors participated.
As part of budget deliberations, the Finance Minister also convened a meeting with the Finance Ministers of the states in the national capital. During the first meeting with the Union Finance Minister, the economists discussed several critical issues among them boosting capital expenditure and reducing the fiscal deficit.
The group of economists suggested to the ministry that the focus should be on reducing the fiscal deficit in the upcoming budget, adding the issue of the need to generate employment growth.
The industry body Confederation of Indian Industry (CII) suggested the government increase capital expenditure in the upcoming budget. The economists also emphasised the need to enhance capital expenditure.
In another meeting, the farmer associations suggested the government enhance the budgetary allocation for the agriculture sector. The agriculture economists and farmers association also demanded to review the current budgetary allocations.
The trade and services industry representatives demanded the policies for the exports and trade meanwhile they suggested the government review the Interest Equalisation Scheme, ease of doing business, and enhance R&D initiatives. The issue of employment was also raised during the meeting.
Industry seeks tax reforms, hiked personal tax exemption limit
The Confederation of Indian Industry (CII), the PHD Chamber of Commerce and Industry (PHDCCI), and the Federation of Indian Chambers of Commerce and Industry (FICCI) had presented a slew of recommendations aimed at bolstering economic growth, enhancing ease of doing business, and fostering sustainable development.
The meetings with Revenue Secretary Sanjay Malhotra and his team highlighted key areas for government focus in the upcoming Union Budget.
The Confederation of Indian Industry (CII) emphasized the need for a significant increase in government capital expenditure, proposing a 25 per cent rise compared to the 16.8 per cent increment outlined in the interim budget.
The CII’s focus is on creating rural infrastructure, including irrigation systems, warehousing, and cold chain facilities, to support agricultural productivity and rural economic growth.
CII suggested, “To boost consumption demand in the short term, steps such as providing a marginal relief in income tax at the lower end of the spectrum with taxable income upto Rs 20 lakhs; reduction in excise duties on Petrol and Diesel: upward revision of minimum wages of MNREGA; raising DBT amount under PM Kisan”.
CII also proposed a mission on Advanced Manufacturing and Advanced Materials to enhance India’s manufacturing capabilities.
Economists suggest continuing capital expenditure
During their discussion, economists emphasized that the fiscal deficit will be further reduced in the upcoming budget, and the government is concentrating on policies to generate employment growth.
“The government has shown fiscal prudence and has controlled fiscal deficit. This time, revised estimates also show positive indications. The government has already stated that the fiscal deficit will be lower in the budget. At the same time, employment remained an important issue of discussion” said Ashwani Mahajan, National Co-convener of the Swadeshi Jagaran Manch.
On the demand for granting special status to some states, Mahajan added, “There’s nothing on special status for states. The government is already doing a lot on capital expenditure, with at least more than 3 per cent of GDP being spent on it.”
Industry bodies, including the Confederation of Indian Industry (CII), urged the government to increase capital expenditure in the upcoming budget. During the discussions, economists also highlighted on the need to boost capital expenditure.
“It is very much in the discussion, that CapEx (Capital Expenditure) has driven or helped to drive the growth of the economy, which should be sustained. And private sector investment and consumption growth should also be sort of pushed to sustain this growth” said Nagesh Kumar, Director and Chief Executive of the Institute of Studies in Industrial Development.
Rajasthan lists demands
Last week, Sitharaman had chaired a meeting with finance ministers of states and union territories in the national capital.
During the meeting, Rajasthan Finance Minister Diya Kumari made several suggestions concerning Rajasthan. She said they have requested special funds for development of Eastern Rajasthan Canal Project (ERCP). The BJP has expressed its commitment towards the project and party leaders in Rajasthan are keen to finish the project in five years.
As per tradition, the Union Finance Ministry consults with the states and stakeholders of the economy ahead of the union budget. As part of this consultation, Sitharaman has met economists, finance and capital market experts and industry bodies.
Sitharaman is set to present the Union budget for 2024-25 in the third week of July. Sitharman had presented an interim budget on February 1 ahead of the Lok Sabha polls. She has so far presented six budgets in a row and will create a record when she presents the full-fledged budget for the new term of the BJP-led Union government. (ANI)