It is anticipated that the forthcoming complete budget will be unveiled during the second week of July.
This Thursday, Nirmala Sitharaman, the Minister of Finance and Corporate Affairs, is expected to have significant pre-budget talks with prominent members of the Indian industry. The purpose of these discussions is to ascertain what the industry anticipates from the Modi 3.0 government’s first comprehensive budget.
It is generally anticipated that the upcoming full-fledged Budget, which is anticipated to be presented in the second week of July, will outline the Modi-led Government’s economic goals for the following five years.
The conference is significant because it will mark the first time that government and business have met at this level since Narendra Modi assumed office as prime minister for a third consecutive term on June 9.
Industry leaders are expected to advocate for the government to stick with its public capital expenditure-driven growth approach, as it has done in the past, according to sources.
Rural advance
They said that there are signs that the budget will mostly target rural India and that it may serve as a political response to the declining patterns of consumption there.
The meeting on June 20 to solicit industry recommendations on how the government should use the ₹2.1 lakh-crore surplus transfer (dividend) from the Reserve Bank of India will be of particular interest to observers of the economy.
Everyone’s main concern is whether the ₹2.1-lakh crore excess should be used entirely for public infrastructure capital expenditures, partially for social welfare program increases in light of the new coalition government, or for fiscal consolidation.
The recommendations made by India Inc. regarding the expected stance that the Modi3.0 government should adopt on privatization and disinvestment in light of the inconsistent results on this front during the previous ten years will be of special interest.
Industry heavyweights including Assocham President Sanjay Nayar, CII President Sanjiv Puri, and FICCI President Anish Shah are expected to attend the pre-budget meeting, according to sources.
Sources state that the Finance Ministry, under the direction of Revenue Secretary Sanjay Malhotra, is anticipated to conduct separate pre-Budget talks with leading business groupings this week.
Reforms in structure
The tax system needs certain structural improvements, according to industry. According to the sources, at the June 20 meeting, policy suggestions aimed at assisting India in becoming the world’s third-largest economy could also be deliberated. Business leaders will probably advocate for the signing of further free trade agreements in addition to proposals on capital gains taxation. According to reports, corporation India is unlikely to request additional rate reductions given that it secured a corporation tax rate cut in September 2019.
The Center announced in September 2019 that the base corporate tax rate for then-existing enterprises would be reduced from 30% to 22%. The corporate tax rate was reduced from 25% to 15% for newly incorporated manufacturing companies after October 1, 2019.