Economy

FM starts pre-Budget consultation for FY 21 Budget

Our Bureau New Delhi | Updated on December 16, 2019 Published on December 16, 2019

Meets representatives from digital economy, start-ups and financial sector in two meetings

Finance Minister Nirmala Sitharaman, on Monday, begun pre-Budget consultation with various stakeholders. The General Budget for financial year 2020-21 will be presented on February 1.

Meanwhile, the government has invited suggestions for the Budget.

“Do you have ideas/suggestions that can become a part of Union Budget 2020-21? Here is the opportunity to share them with @FinMinIndia. Visit https://www.mygov.in/group-issue/inviting-ideas-and-suggestions-union-budget-2020-2021/,” a tweet from the government said.

Earlier in the day, the Finance Minister held the first meeting with stakeholder groups from Digital Economy, Fintech and Start-ups. The main areas of discussion included data issues such as use of Big Data technology, phenomena by analysing large data sets, Use of Big Data Technology for SME Sector and unleashing the power of Big Data for Public Governance.

Other issues which dominated the discussion included Digital Infrastructure and Role of Government, Regulation of Digital Economy especially in privacy, Financial Regulation, Ease of doing Business environment for start-ups, infrastructure gaps for digital India, taxation issues among others.

The representatives of Digital Economy, Fintech and Start-ups shared their views and suggestions regarding Big Data, incentives for encouraging setting up of data centres, fiscal incentives for data localisation, incentives for pushing digital penetration in rural areas, credit guarantee to start-ups for competing with other nations, rationalisation of MAT tax rate, tax exemption for start-up units, creation of specific agency for looking after cross border financial crimes, increasing women employment (gender dividend in skill development), training youth in skill development along with international internships and incentivising Research & Development (R&D) within India.

While the experts suggested improvements in their respective fields, they also gave a variety of solutions to the sector specific problems. Many speakers suggested giving tax sops to start-ups.

In the second meeting, there was wide ranging discussion with the stakeholders from the financial sector and capital markets. The issues discussed included increasing credit offtake from banks, governance changes in PSBs with special focus on PJ Nayak Committee recommendations, creation of a well functioning bond markets, benefits of Partial Credit Guarantee Scheme, Alternative Investment Funds in the real estate sector, measures for alleviating stress among NBFCs among others.

To boost Indian markets, the representatives of financial sector and capital markets submitted several suggestions concerning enhancing credit offtake from banks, PSBs governance, risk capital issues, improving functioning and alleviation of stress among NBFCs , Alternative Investment funds, Mutual funds, commercial papers and standardisation of Bond features, promoting leasing by reducing GST, reduction of GST rates on term insurance for increasing its penetration and to provide easier credit to digitally active users by streamlining KYC norms . Suggestions were also received for enhancing support from Private Banks to Stand up India Scheme.

The Minister will hold two meetings on Tuesday. First one will be with stakeholder groups of industry, service and trade, while second one will be with those from agriculture and agro processing industry.

Published on December 16, 2019
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