As the government gears up to unveil the comprehensive budget for the fiscal year 2024, there is palpable anticipation among both industry stakeholders and the general public.
Numerous consultations have preceded the budget presentation, during which a wide array of stakeholders have submitted their recommendations and proposals to the government.
Subhrakant Panda, the Immediate Past President of the Federation of Indian Chambers of Commerce and Industry (FICCI), held discussions with Finance Minister Nirmala Sitharaman on June 20 to discuss key priorities.
Panda emphasized the crucial need to sustain the current growth trajectory by stimulating demand, particularly through robust investments in infrastructure. Additionally, he highlighted the importance of addressing food inflation concerns and providing essential support to Micro, Small, and Medium Enterprises (MSMEs), alongside fostering innovation and advancing research & development initiatives.
“We are optimistic about a prudent budget that builds on India's economic strengths to accelerate growth while maintaining fiscal discipline,” Panda remarked.
FICCI's recommendations for Budget 2024 encompass a broad spectrum of measures aimed at bolstering economic resilience and fostering long-term prosperity:
Maintaining momentum in investments - FICCI recommends a continued emphasis on public capital expenditure (capex) across physical, social, and digital infrastructure, proposing an increase in the capex outlay for FY25 by 25% over the Revised Estimate (RE) for FY24, amounting to Rs 11.8 lakh crore.
Promoting innovation and research & development - To operationalize the Rs 1 lakh crore fund allocated in the Interim Union Budget for research and innovation in sunrise sectors, FICCI proposes focusing on translating early-stage research into viable projects that generate sustainable cash flows. They advocate for enhancing the Patent Box regime and establishing innovation clusters that foster collaboration among private enterprises, academia, investors, startups, and government-funded R&D institutions.
Streamlining the tax regime - FICCI calls for simplifying Tax Deducted at Source (TDS) provisions and capital gains taxes, advocating for a streamlined structure with only three TDS rates and a simplified categorization of capital gains across different asset classes. They also suggest introducing an independent Dispute Resolution Forum and initiating GST 2.0 reforms aimed at reducing tax slabs and facilitating seamless pass-through of input tax credits.
Enhancing MSME liquidity and financial accessibility - FICCI proposes revising the turnover threshold for mandatory registration on the Trade Receivables Discounting System (TReDS) platform from Rs 500 crore to Rs 250 crore. They advocate for integrating GST-registered MSMEs with TReDS to facilitate easier access to finance from financial institutions.
Boosting exports - FICCI recommends revising duty drawback rates and enhancing Remission of Duties and Taxes on Exported Products (RoDTEP) to enhance the competitiveness of Indian exports. They propose developing a blockchain-based single portal for trade-related compliances and promoting cross-border paperless trade through electronic exchange of customs declarations and certificates.
Strengthening the agricultural ecosystem - FICCI suggests launching a mission for the bottom 100 districts to improve agricultural productivity and establishing a national program for farm technicians. They advocate for establishing collaborative research networks between the private sector and government agricultural research institutions, as well as creating a national board for Farmer Producer Organizations (FPOs).
Accelerating tourism development - FICCI recommends granting infrastructure status to tourism projects with capital expenditures exceeding Rs 50 crore and establishing a ‘Tourism Development Fund’ jointly funded by the central and state governments to support infrastructure development in emerging destinations and remote districts.
Promoting sustainability - FICCI urges the government to introduce a National Taxonomy for Green Finance and develop pathways for a green transition across sectors. They propose launching a national vision document for a circular economy and revising the Priority Sector Lending framework to include climate adaptation and mitigation activities.
Addressing food inflation - To combat food inflation, FICCI proposes establishing a Food Inflation & Response Strategy Team (FIRST) under the Prime Minister's Office (PMO) to coordinate short-term logistical strategies and long-term agricultural production and distribution planning.
Facilitating affordable financing for last-mile mobility electrification - FICCI recommends introducing the SIDBI EV4ECO Scheme to support the adoption of 10,000 electric three-wheeler passenger carriers (L5M auto rickshaws), aimed at accelerating the transition towards electric mobility in the last-mile connectivity sector.
These comprehensive recommendations by FICCI aim to shape a balanced budget that effectively addresses current economic challenges while laying a robust foundation for sustainable growth in the future.
