New Delhi: Major industry bodies said on Monday the upcoming Union Budget 2019-20 is an opportunity for the new government to boost consumption and investments with fiscal stimulus and policies.
Recent signs of a slowdown in the economy stem not only from slow growth in investments and subdued exports but also from weakening growth in consumption demand.
This is a matter of serious concern and if not addressed urgently, the repercussions would be long-term, said the Federation of Indian Chambers of Commerce and Industry (FICCI).
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"Amid rising uncertainties and economic challenges on the both domestic and global front, there is an urgent need to re-energise the engines of growth and pump prime the economy," it said in a pre-Budget memorandum to the government.
The Confederation of Indian Industry (CII) called for lowering corporate tax rates, maintaining the peak rate of customs duty, kickstarting government expenditure and rationalising tax deducted at source (TDS) as well as dispute resolution provisions.
"Employment creation needs a strategic boost, including from the lens of revenue generation," said CII President Vikram Kirloskar.
"The key sectors to be propelled for more job generation include the tourism ecosystem, the textiles to garments value chain, and farm-to-fork supply in the agriculture and food processing sector. End-to-end supply chains in the auto industry, the construction sector and retail sector also require strong policy attention," he said.
To fire the four engines of consumption, investment, government spending and exports, it is essential to reduce income tax burden and expand the scope of investment allowance to all sectors including services sector, mining, electricity generation, infrastructure service providers, agriculture and agro-processing sector, said Kirloskar, adding that there is a need for higher export incentives to help Indian exporters address the cost disadvantage in global markets.
"With fiscal deficit a top priority, a good measure of fiscal health would be to consider revenue and capital expenditure quality, revenue receipts quality, revenue and fiscal deficits to GDP through a composite fiscal deficit index," he said, adding that the government can announce a roadmap for tax policy over the next five years to attract investments.
