Allow people to spend more: India Inc to Jaitley

The upcoming Budget should come up with fiscal measures to raise the disposable income of households and induce people to spend, India Inc has suggested.

There is a need to increase the investment limit under Section 80C of the income tax law, link the income tax exemption slab to inflation and remove the surcharge, captains of Indian industry told Finance Minister Arun Jaitley during pre-Budget consultations on Tuesday.

The Centre must also introduce gold-backed savings and investment products to help monetise households’ large stock of gold, said industry chambers FICCI, Assocham and CII.

They also made a case for re-introduction of tax breaks for individuals parking money in infrastructure bonds.

The chambers also called for a ramp-up in public investments, especially in infrastructure.

“The Government could contemplate a reverse build, operate and transfer (BOT) structure to fund the initial construction cost for creating infrastructure assets. Once the projects are completed and start generating cash flows, they can be given out to the private sector for operation and maintenance on a revenue sharing basis,” said Ajay S Shriram, President, Confederation of Indian Industry (CII), after the nearly two-hour-long meeting.

Assocham President and Yes Bank MD & CEO Rana Kapoor said there was a suggestion that the Centre should utilise the large cash surpluses of top Navratna companies to give a much needed boost to infrastructure.

It makes eminent sense for the Centre to utilise the ₹2 lakh crore surplus in the balance sheets of top Navratna companies, especially when the balance sheets of many private companies are weak, he said.

Besides recommending a five-year systematic programme for disinvestment, especially in non-strategic sectors, there was also a suggestion that the government explore the possibility of listing of IRCTC, he said. IRCTC is a government-owned enterprise that manages the online ticket booking portal of Indian Railways.

FICCI President Jyotsna Suri urged the finance minister to rationalise the tax structure and also help bring down the cost of capital through reduction in interest rates.

“I can’t give out the quantum of reduction required. But certainly a cut in the interest rate will help industry,” she told BusinessLine .

CII said the Budget should issue a clarification on how capital gains from indirect transfers become taxable in India.

On its part, Assocham has suggested withdrawal of the retrospective amendment made by the Finance Act, 2012, in respect of indirect transfers .

“This will go a long way in creating a conducive business environment and improve investor confidence,” the industry body has said.

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