Budget should ensure tax, policy stability: India Inc tells FM

Our Bureau | | | Updated on: Dec 16, 2021

FM Nirmala Sitharaman | Photo Credit: -

Wants govt to continue the thrust on growth, reforms

Corporate India on Thursday urged Finance Minister Nirmala Sitharaman to ensure that the upcoming Union Budget 2022-23 maintained tax stability and continued the thrust on growth and reforms. Such an approach was needed to help firmly entrench the nascent signs of recovery being currently seen in private investments, TV Narendran, CII President told the Finance Minister at the virtual pre-Budget consultation held with industry captains.

Assocham President Vineet Agarwal suggested the introduction of Vivad Se Vishwas type scheme for customs, telecom, mining, power and other sectors. The settlement of the pending cases in these sectors will add some revenue to the Government as well as unleash huge positive gain in investor sentiments, Agarwal added.

Unified registration

In a separate pre-Budget meeting that Sitharaman had with heads of financial sector industry and financial sector regulators, financial sector honchos urged the government to introduce the concept of a single unified nation level registration for goods and services tax. Currently, financial services providers have to take GST registration separately in each of the State where they provide services and this was making compliance complex and onerous for the service providers, they added.

This meeting was attended by SBI Chairman Dinesh Kumar Khara, Uday Kotak, MD and CEO, Kotak Mahindra Bank, Rakesh Singh, Group Head — Investment Banking, Private Banking, Capital Markets and Financial Institutions at HDFC Bank, Sandeep Bakshi, MD and CEO of ICICI Bank, BSE MD and CEO Ashish Chauhan and Nilesh Shah, Kotak Mahindra Asset Management Company. Also present were SEBI Chairman Ajay Tyagi and PFRDA Chairman Supratim Bandyopadhyay. The NBFC sector was represented by Muthoot Finance MD George Alexander Muthoot and Finance Industry Development Council Director Raman Aggarwal.

Raman Aggarwal said, “If NBFCs are to be regulated like banks, then the typical NBFC model of lending would suffer which shall impact lending to the unbanked/underbanked segment of the society. Flexibility is the key that is required primarily from these borrower’s perspective.”

He also highlighted that the RBI had lately reworked the regulatory framework for NBFCs with the prime objective of harmonising it with that of banks. “Regulation and development must go hand in hand and there is an urgent need to bring harmonisation in related to taxation and recovery, too,” Aggarwal told BusinessLine , adding that this was conveyed at the pre-Budget meeting.

CII President Narendran said that the government, through enhanced infrastructure spending, should continue to support growth.

“Infrastructure sector with a multiplier impact on rest of the economy requires interventions specially to improve and diversify sources of financing. In this context, it is suggested that the government should consider developing the municipal bond market so that urban local bodies can raise funds for investing in infrastructure,” Narendran said.

In addition, it is recommended that the government should consider replacing bank guarantees with surety bonds to encourage private sector participation in the infra space, he added.

Technology Commission

To encourage greater technology adoption in the economy, CII suggested the setting up of an overarching Technology Commission of India to coordinate, integrate, synergise and manage all technology related strategy, funding, policy, deployment and public private partnerships.

For meeting India’s commitments at COP26, the upcoming Budget could look at announcing the creation of a Central Agency to work out strategies to address issues pertaining to technology creation, acquisition and adoption and also financing at a mammoth scale, Narendran added. Announcement of Green Procurement Policy and encouraging adoption of hydrogen as an alternative fuel through extending investment allowance for installation of electrolysers could also be explored in the Budget, he suggested.

Assocham President Vineet Agarwal suggested that a Dispute Resolution Scheme for Customs be introduced. He said in the Union Budget 2019, the government had introduced the Legacy Dispute Resolution Scheme to facilitate quick closure of pending disputes under the Central indirect tax laws. This scheme received good response, he noted.

“A similar scheme could be introduced for Customs, in order to provide an opportunity to taxpayers to clear past baggage and reduce litigation. This will help the industry in considerably reducing the baggage of litigation and will also help the Government in unlocking the tax dues,” Agarwal said.

Published on December 16, 2021
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