Corporate India — CII and FICCI — have urged the Finance and Corporate Affairs Minister Nirmala Sitharaman to stay the course on Capex-led growth strategy in the upcoming Vote-on-account as well to  sustain the ongoing growth momentum of the economy. 

Centre’s capital expenditure must be increased by at least 20 per cent to ₹12 lakh crore, Confederation of Indian Industry (CII) said in its submissions for Vote on Account and Union Budget 2024-25.

Although lower than the Capex growth rates in the last three years, this is higher than the pre-pandemic 12 per cent annual growth between FY16 and FY20, CII said. 

The apex chamber also suggested that central support to State Capex — in the form of an interest-free 50-year loan — be expanded by about ₹30,000 crore to ₹1.6 lakh crore. Some of the support could be linked to reforms by States, CII has suggested. 

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On its part, FICCI in its pre-budget memorandum said that India is at an important inflexion point and given the current global developments and associated headwinds, the government should continue to lay thrust on public capex (on physical, social and digital infrastructure) in the forthcoming Budget. 

CII has also made a case for retaining the corporate tax rate at the current level, stating that this is required to provide tax certainty for businesses. “CII deeply appreciates the government’s move to maintain stability in tax rates, despite the tumultuous economic and political developments in the last three years,” it added.

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CII has suggested that buy-back tax (BBT) should be exempted in case of listed shares wherein buy-back is done by a company in the open market through the stock exchange method. 

Consequently, exemption under Section 10 (34A) should not be applicable and transactions should continue to be subject to capital gains tax in the hands of shareholders. 

FICCI highlighted that BBT was introduced to curb tax avoidance by companies using the buy-back route and given that the promoter group cannot participate in buy-back in the ‘open market through the stock exchange method’, the justification for levy of BBT does not exist in such cases. 

Hence, BBT should be exempted in case of listed shares wherein buy-back is under the ‘open market through the stock exchange’ method. The transaction should continue to be subject to capital gains or business income tax in the hands of shareholders, FICCI said. 


To give a boost to newly established manufacturing companies, both CII and FICCI made a case for extending the sunset date for availing of the concessional tax rate of 15 per cent under Section 115BAB of the income-tax law. 

Section 115BAB was introduced to provide an incentive to newly established manufacturing companies i.e. companies set up and registered on or after October 1, 2019, which had commenced manufacturing before March 31, 2023, by levying tax at the concessional rate of 15 per cent subject to certain conditions. This date was later extended to March 31, 2024. 

CII has now suggested that the sunset clause for concessional tax be extended by one year from March 31, 2024 till March 31, 2025. This would encourage more investment in the manufacturing sector and exports, it added. 

On its part, FICCI has suggested that the government could consider extending the concessional tax regime for manufacturing operations for at least five years. 

“Many global investors are today considering investment in India and extending such a concessional tax regime for five years will ensure stability and certainty, thus bolstering investor confidence to set up manufacturing units in India,” FICCI said.