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Union Budget Expectations 2021: Chambers suggest ways to turn economy around

Union Budget 2021
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Union Budget 2021

Highlights

Industry bodies such as Confederation of Indian Industries (CII), Federation of Indian Chambers of Commerce and Industries (FICCI) and Federation of Telangana Chambers of Commerce and Industries (FTCCI) want Union Finance Minister Nirmala Sitaraman to focus on boosting growth as well as strengthening financial sector, which could help rid the economy of severe contraction caused by the Covid-induced crisis.

Hyderabad: Industry bodies such as Confederation of Indian Industries (CII), Federation of Indian Chambers of Commerce and Industries (FICCI) and Federation of Telangana Chambers of Commerce and Industries (FTCCI) want Union Finance Minister Nirmala Sitaraman to focus on boosting growth as well as strengthening financial sector, which could help rid the economy of severe contraction caused by the Covid-induced crisis.

Representatives of the Industry bodies are optimistic that the year 2021 would be a much better for the economy and hoped that economy, industry and livelihoods of people would turn for the better. They are hopeful that the Union Budget 2021 would play a vital role in achieving the objective of putting India on a sustained high-growth trajectory.

The CII has recommended a three-pronged strategy for Budget 2021 centering around the key themes of growth, fiscal consolidation and strengthening of the financial sector that would help overcome the impact of Covid on the economy. Its Telangana chapter chairman Krishna Bodanapu opines thus: "This year's budget comes at a time when the Indian economy is recovering from the unprecedented shock caused by Covid. The government has an unenviable task of ensuring a fine balance between supporting economic recovery and growth on one hand and ensuring macro-economic stability on the other."

CII suggests the budget proposals should focus on growth, and alongside look at fiscal management from a three-year perspective. "Government expenditure should be prioritised in three areas- infrastructure, healthcare and sustainability. The budget proposals should also address two critical areas of boosting private investments and providing support for employment generation," said the TS CII president.

FICCI Telangana Council chairman T Muralidharan if of the view that the upcoming budget must prioritise growth-oriented measures and fiscal considerations should be secondary. As part of macro suggestions, the FICCI wants the government to launch a scheme on the lines of MGNREGA for urban poor. Apart from these, the interest subvention of housing loans of 3-4 per cent for a period of three to four years would not help real estate but have a multiplier effect on many other industries.

"Consider making employee's contribution to EPF voluntary (without making any change in the employer's contribution). Also consider giving a three-year holiday for ESI contribution to both employers and employees. These will enhance the take home salary for individuals and will be helpful in reducing the gap between gross and net salary for employees at the bottom of the pyramid. Government has envisaged increasing public spend on healthcare to 2.5 per cent of GDP (from around 1.3 per cent currently). We urge the government to start spending an extra 0.5 per cent of GDP every year on health for the next five years," said Muralidharan.

The FICCI Telangana chairman called for acceleration in disinvestment programme. Privatisation should be in true spirit ensuring capital investment from private sector (domestic or foreign). Issuing a long-term pandemic bonds in both domestic and international markets, which could provide additional space for the government to borrow.

The Federation of Telangana Chambers of Commerce and Industries (FTCCI) urges the Centre to simplify income tax laws. FTCCI chairman Ramakanth Inani says the Income Tax Law should be simplified. There should be a Uniform Financial Year instead of Assessment Year. For reassessment - section 147/section 148 should be restricted to only exceptional cases, time limit should be prescribed for grant and payment of refund, TCS provision should be withdrawn alternatively. Besides, the organised sector, wherein the entire data is available in the GST returns, should be exempted from these provisions.

Inani further says the Section 80C deduction limit should be increased from Rs 1.5 lakh to Rs 2.5 lakh. The Section 44AD - presumptive tax basis should be extended to all assessees, including LLP. Under the interest on housing loan, the government should increase the limit to Rs 3 lakh under Section 24.

CII suggests the budget proposals should focus on growth, and alongside look at fiscal management from a three-year perspective. Government expenditure should be prioritised in three areas- infrastructure, healthcare and sustainability. The budget proposals should also address two critical areas of boosting private investments and providing support for employment generation – CII Telangana chapter chairman Krishna Bodanapu

Income Tax Law should be simplified. For reassessment - section 147/section 148 should be restricted to only exceptional cases, time limit should be prescribed for grant and payment of refund, TCS provision should be withdrawn alternatively. Section 80C deduction limit should be increased Rs 2.5 lakh. As for interest on housing loan, increase limit to Rs 3 lakh – FTCCI chairman Ramakanth Inani

Consider making employee contribution to EPF voluntary (without any change in employer's contribution). Also, consider giving a three-year holiday for ESI contribution to both employers and employees. These will enhance the take home salary for individuals and will be helpful in reducing the gap between gross and net salary for employees at the bottom of the pyramid – FICCI Telangana Council chairman T Muralidharan

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