Industry bodies on Monday gave suggestions — starting from higher capital investment to fiscal consolidation and a focus on climate change — along with a host of other issues for the Union Budget 2023-24. These were conveyed during the first set of pre-Budget consultations Finance Minister Nirmala Sitharaman held with various stakeholder groups.
In his presentation, Sanjiv Bajaj, President of CII, suggested a three-pronged strategy for fiscal management which includes lowering the fiscal deficit from 6.4 per cent in FY23 to 6 per cent in FY24 and to 4.5 per cent by FY26, augmenting revenue through aggressive privatisation and broadening the tax base.
Fiscal management
“Tax base should be broadened to achieve goal to increase the tax/GDP ratio to at least 16 per cent over the medium-term from current level of 11.7 per cent,” Bajaj said.
CII also talked continuation of investment-led growth strategy to pump up the economy besides generating jobs to meet the aspirations of India’s youth, for a more equitable growth and to broad base consumption and demand. Bajaj suggested a three-point strategy for boosting jobs.
“One, announce an employment-linked incentive scheme for employment intensive services sectors – we suggest to start with tourism, logistics, retail and film, animation and gaming. Two, expedite the DESH (Development of Enterprise and Service Hubs) Bill to replace the existing SEZ Act and implement NITI Aayog’s recommendations on creating coastal economic zones (CEZs). And, three, institute pilots for the urban employment guarantee programme,” he said.
Private investments
Participating in the meeting, Saket Dalmia, President of PHD Chamber of Commerce and Industry, suggested a five-pronged strategy to revitalise private investments. These include enhancing consumption, increasing capacity utilisation in factories, creating employment, enhancing quality of social infrastructure and strengthening economic growth.
”To enhance the momentum in private investments, there is a need to percolate the ease of doing business at the factory level; rationalisation of cost of doing business, rationalisation of taxation, state-of-the-art infrastructure and enhanced incomes in the agriculture sector would go a long way in revitalising private investments in the country,” he said.
Green Budget
On his part, Sumant Sinha, President of Assocham, called for the Budget to be “Green Budget” given the backdrop of the recently concluded COP27 as well as in light of India’s chairmanship of the G20. Though he acknowledged successful efforts for sustainable growth, he felt that global headwinds could slow down the growth. It was therefore imperative to boost demand. In this backdrop, he suggested that the forthcoming budget focus on areas such as green hydrogen and green tourism.
“The country has done well in revenue collection and as India emerges as the global solution provider across segments, we need to ensure that the growth momentum is front-ended by the government by raising capex further. Infrastructure investments by the government should be pushed further in the coming year to boost private sector investment cycle, which is around the corner as global value chains realign themselves,” he said.
The government is yet to announce the date of Budget presentation, but it is expected to be on February 1.