Lobby groups and top industry executives said that the budget for the year starting 1 April would be crucial to address challenges related to consumer demand and job creation amid slowing world economic growth and geopolitical uncertainties.
Businessmen, including Sanjiv Goenka, chairman of RPSG Group; B.V.N. Rao, chairman of GMR Group; and Naveen Munjal, managing director of Hero Electric Vehicles; and representatives of lobby groups, participated in the meeting with Sitharaman as she readies the budget for the next fiscal year.
Union budget for 2023-24 is expected to be presented on 1 February.
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“The global growth slowdown has already started to impact our exports after a stellar performance last fiscal. The external scenario is likely to continue to be unfavourable for some time. Hence, we must broadbase our economy by creating new sectors of growth and driving employment generation to boost domestic demand, inclusion and growth," Sanjiv Bajaj, president of the Confederation of Indian Industry (CII) and chairman of Bajaj Finserv Ltd, said during the pre-budget meeting.
CII recommended an aggressive focus on privatization and broadening the tax base through rationalizing GST rates and reforming the tax administration. In addition, the lobby group suggested that the budget target higher asset monetization receipts in FY24.
“The budget should increase allocation to capital expenditure by 35%, like last year, taking the total public capex to about ₹10 trillion. This must also focus on rural infrastructure, which would help create employment in rural areas and boost rural demand that is today a concern in the domestic economy," Bajaj said.
This was the first of several pre-budget 2023 consultation meetings this week. The meetings with businessmen and experts in the field of infrastructure and climate change were chaired by Sitharaman and attended by ministers of state for finance Pankaj Chaudhary and Bhagwat Kishanrao Karad, finance secretary T.V. Somanathan, secretaries from other departments of the finance ministry, and chief economic adviser V. Anantha Nageswaran.
Assocham president Sumant Sinha highlighted the need to raise capex to boost the private sector investment cycle as global value chains get realigned. It also urged the government to cut personal income tax and extend the 15% corporation tax rate for new manufacturing units by another five years.
Currently, new units that start manufacturing before 31 March 2024 are eligible for the concessional 15% corporation tax rate.
“To further boost domestic demand and increase the disposable income in the hands of people, the personal income tax should be reduced at all levels…the alternative tax regime of 15% available to new manufacturing entities should be extended to existing and new companies engaged in focus sectors such as logistics, renewables, healthcare, EVs, etc., to help generate employment, sustainable climate change and drive economic growth," Sinha said in his representation.
On Tuesday, the finance minister will meet representatives from the agriculture and agri-processing industry, representatives from the financial sector, and the capital markets. She will also meet the representatives of the services sector and trade bodies, besides experts from the social sector, including health, education, water, and sanitation, later this week.
The pre-budget meetings with trade union representatives and economists are scheduled for 28 November.
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