Kolkata : India’s industry chambers want the coming union budget to carry out financial reforms especially in taxes, and promote “Make In India” by balancing the fiscal factor.
While industry body Federation of Indian Chambers of Commerce and Industry (FICCI) is expecting Finance Minister Arun Jaitley – set to unveil his second budget Saturday – to step up action on ease of doing business and simplify the tax structure, Confederation of Indian Industries (CII) feels revenue expenditure needs reduction while the capital expenditure should go up to boost the Make in India campaign.
“The various announcements made by the government over the course of last seven to eight months did have a positive impact on the sentiment of the business community; however in order to sustain this buoyancy, it will be important that the process of implementation of these reforms continues with momentum,” FICCI said in a statement.
It also pitched for labour reforms and incentives for sectors including manufacturing, infrastructure and real estate in the forthcoming budget.
CII meanwhile said: “Sustained GDP (valuation of domestic finished goods) growth is essential for tax revenue buoyancy, and growth recovery needs a capex stimulus. Capital expenditure was budgeted at Rs 2.3 lakh crores in FY 15 and is still falling short.”
It also said while the disinvestment target in the ongoing fiscal (2014-15) was Rs.63,000 crore, company heads across sectors expect this to cross the Rs.75,000 crore mark in the coming fiscal.
“The Kelkar Committee roadmap target for revenue deficit in FY 15 was 2 percent of GDP. The budget (target) was 2.9 percent. According to majority of CEOs, the revenue deficit target for the coming year would be between 2.6-2.8 percent,” it said.
It also sought s roadmap to bring the “subsidy burden” down to 1.5 percent of GDP from the current level of 2.3 percent over the next two years.
Amidst recommendations to step up reforms and smoothen the way for private players, introduction and impact of the much awaited Goods and Services Tax (GST) is also a major expectation of the industry associations.
“A framework for GST would be announced, which would tilt the balance towards higher GST rate, in the interest of revenue neutrality,” the CII said.
Market researcher KPMG India is also seemingly optimistic about the roll-out of the tax.
“75 percent responded positively to introduction of GST along with their expectation that the Budget will lay the road map for implementing the same,” the company said from the findings of a recent survey on budget expectations.
The researcher also said from its survey on India Inc conducted recently, 83 percent of respondents “expect the government to “turn India into a global manufacturing hub” expecting tax reforms.