India Inc seeks income tax cut to boost demand

NEW DELHI: Industry bodies on Monday demanded special focus on generating demand through income tax cuts, higher public spending and job creation by providing a thrust to small businesses in the budget.
During the pre-budget consultations with FM Nirmala Sitharaman, CII president Sanjiv Puri suggested that the marginal rate of personal tax on income up to Rs 20 lakh be reduced to generate more demand and also slash the excise duty on fuel to cool down inflation.
While suggesting a 25% increase in govt capex and customs duty alignment to ensure that India is part of the global value chain, the ITC chief also proposed steps to improve credit flow to MSMEs and develop rural industrial parks, especially near industrial hubs.
“Given the uncertainty amidst persisting global headwinds, govt’s thrust on public capex on physical, social and digital infrastructure will be important to maintain the growth momentum,” Ficci said.
Assocham president Sanjay Nayar too focused on MSMEs and underlined the need for ease of credit flow as they continued to face challenges, despite the need for collaterals being done away with. Besides, he sought urgent attention on skilling and making life easier through presumptive tax mechanism for small businesses and data centres, among others.
In its representation, Ficci proposed that Sitharaman continue with the work started on rationalisation of TCS and TDS rates, and suggested that govt should stop these deductions and collections for items that are already part of the GST chain as data for these transactions is already available.
Besides, it has recommended several measures to promote daycare and childcare benefits for women, including tax exemption for those with children up to a certain age. Several economists have also suggested steps to increase female participation in the workforce. Then there are sector specific measures that have been proposed for segments, such as defence and PCB, apart from agriculture, health and education.