What top business leaders have told Nirmala Sitharaman

NEW DELHI : India’s top business leaders have asked Finance Minister Nirmala Sitharaman to raise capex 10 trillion, rationalize personal income tax rates, especially at the lower end of the income spectrum, and focus on job creation in the last full budget of the Modi government before the 2024 national elections.

Lobby groups and top industry executives said the budget for the year beginning April 1 would be critical to meeting challenges related to consumer demand and job creation amid slowing global economic growth and geopolitical uncertainties .

Businessmen including Sanjiv Goenka, Chairman of RPSG Group; BVN Rao, Chairman of GMR Group; and Naveen Munjal, CEO of Hero Electric Vehicles; and lobby group representatives, participated in the meeting with Sitharaman as she prepares the budget for the next fiscal year.

The Union budget for 2023-2024 is expected to be presented on 1 February.

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“The global slowdown in growth is already starting to affect our exports after an excellent performance last financial year. The external scenario is likely to remain unfavorable for some time to come. Therefore, we need to broadly base our economy by creating new growth sectors and boosting job generation to drive domestic demand, integration and growth,” said Sanjiv Bajaj, President of the Confederation of Indian Industry (CII) and Chairman of Bajaj Finserv Ltd, at the pre-budget meeting.

CII recommended an aggressive focus on privatization and broadening the tax base through rationalization of GST rates and tax administration reform. In addition, the lobby group suggested that the budget focus on increased revenue for FY24 monetization.

“The budget should increase the allocation to capital expenditures by 35%, as it did last year, bringing total government expenditures to approx. 10 trillion. This should also target rural infrastructure, which would help create employment opportunities in rural areas and boost rural demand, which is a concern in the domestic economy today,” Bajaj said.

This was the first of several pre-budget 2023 consultation meetings this week. The meetings with businessmen and experts on infrastructure and climate change were chaired by Sitharaman and attended by State Finance Ministers Pankaj Chaudhary and Bhagwat Kishanrao Karad, Finance Minister TV Somanathan, secretaries of other departments of the Ministry of Finance and Head of Economic Affairs . advisor V. Anantha Nageswaran.

Sumant Sinha, president of Assocham, stressed the need to increase capital spending to boost the private sector investment cycle as global value chains realign. It also urged the government to cut income tax and extend the 15% corporate tax rate for new manufacturing units for another five years.

Currently, new units that go into production before March 31, 2024 are eligible for the favorable corporate tax rate of 15%.

“To further stimulate domestic demand and increase disposable income in the hands of people, income tax must be reduced at all levels… the 15% alternative tax regime 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 create jobs, drive sustainable climate change and boost economic growth,” said Sinha in his representation.

On Tuesday, the Minister of Finance will meet representatives of agriculture and the agro-processing industry, representatives of the financial sector and the capital markets. She will also meet representatives from the service sector and trade organizations later this week, as well as experts from the social sector, including health, education, water and sanitation.

The pre-budget meetings with union representatives and economists are scheduled for November 28.

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