Highlighting India's robust economic growth amid a global slowdown, the Confederation of Indian Industry (CII) has presented a comprehensive set of policy recommendations for the upcoming interim Union Budget. The industry group urges Finance Minister Nirmala Sitharaman to consider measures across various sectors, emphasizing investment, tax rationalization, revenue enhancement, and more.
In their suggestions, India Inc advocates for a balanced approach between fiscal consolidation and economic growth, recommending a reduction in the fiscal deficit to around 5.4% of the GDP in the next financial year. The CII proposes a revamped Goods and Services Tax (GST) structure, advocating for a three-rate system catering to essentials, standard goods, and luxury/demerit goods.
Addressing the government's divestment program, the CII calls for a transparent process to gauge investor interest in all Public Sector Enterprises (PSEs) slated for privatization, with prioritization based on higher interest.
In a bid to boost capital expenditure, the CII suggests a 20% increase in the budget towards capital expenditure, reaching Rs 12 lakh crore. India Inc also recommends a revision of food and fertilizer subsidies based on updated datasets for better targeting.
The CII advocates the extension of the interest subvention scheme for low-cost and affordable housing, covering total housing costs up to Rs 35 lakh. Additionally, they propose the launch of a 'National Mission for Advanced Manufacturing' to enhance quality and productivity, alongside expanding Production-linked Incentive schemes to labor-intensive and import-dependent sectors.
To improve ease of doing business, the CII calls for the continued decriminalization of business laws and strengthening dispute resolution mechanisms. They suggest reducing logistics costs by timely implementation of the National Logistics Policy.
In the realm of MSMEs, the CII proposes the creation of a separate vertical for micro-enterprises within the MSME Ministry. Import tariff rationalization is recommended with a three-tier duty structure, emphasizing zero or low duties for raw materials, a standard rate of approximately 7.5% for final goods, and intermediary goods falling in between.
Furthermore, the CII urges the government to increase the share of research and development (R&D) in the nation's GDP to 1.25% by 2025 and 2.5% by 2030. They recommend linking all skill development schemes with schools and colleges, public and private, to ensure effective skill development across the populace. The proposals reflect a comprehensive vision for sustaining and accelerating India's economic growth trajectory.
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