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The Madras Chamber of Commerce and Industry (MCCI) on Friday urged the Finance Minister to heighten infrastructure spending to create a multiplier effect on the economy and front-end some of the significant outlays announced in the previous budget during the current year.
Presenting the budget wish list of MCCI, Chamber's President Srivats Ram said, “While the Finance Minister in her budget speech last year had detailed significant outlays for the next five years, it is important to look at considerable front-ending of these in the coming year to give a much-needed fillip to the economy.”
He also suggested that given the limited resources of the government to splurge on big infrastructure projects, it can consider floating tradable 15-year infra bonds to address the funding challenges.
“It might be worthwhile for the government to float tradable 15-year infra bonds that bear an interest rate 1% over the treasury rate which in redemption would be taxed at a concessional rate of 5%,” Ram said.
He, however, added that while the infra bonds on its own would not suffice to raise funds for infrastructure projects, it could help plug gaps in funding.
Covid vaccine expenses: Tax-free bonds may be just what the doctor ordered
The MCCI President also suggested that the government could look at creating interest bearing ‘Corona’ Bonds involving investor citizens as the country has already begun the largest vaccination drive in the world. Interest up to ₹2.5 lakh can be exempted for individuals, he suggested.
MSMEs
Pitching for a tax exemption for MSMEs, Ram said, “The government could look at a scheme wherein firms could be allowed 50% of their profits to be exempt from tax if that amount is deposited in scheduled banks to be used for investment in plant equipment over a three-year period.”
He also added that there should be an incentive for organizations to move their offices from urban centers to non-urban regions where possible. This, Ram said, will enable a more widespread employment across the country.
“While the government has initiated Remission of Duties or Taxes on Export Product (ROTDEP) and Production-Linked Incentive (PLI) schemes for exporters and manufacturers, they should hasten the notification of rates on these schemes to enable business to better plan for the future,” Ram said.
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