Priority should be given to revitalise the agriculture sector through increased investments in irrigation across the country and strengthen the agricultural supply chain to reduce wastage and better prices.
Before the Budget on July 05, the Federation of Indian Chambers of Commerce and Industry (FICCI) has submitted a set of recommendations to the Centre.
– Priority should be given to revitalise the agriculture sector through increased investments in irrigation (including micro-irrigation), strengthen the agricultural supply chain to reduce wastage, and better prices for farmers.
– Need for priority investments in farmgate and near-farmgate storage (of more than 1,000 MT) built under Rashtriya Krishi Vikas Yojana (RKVY) to enable small producers to hold produce till market prices are remunerative enough to sell.
– A plan for a national warehouse grid along highways should be launched and need for a major improvement in the agro-processing industry given that India is one of the largest producers of several agri-products.
Provide fillip to the infrastructure sector through major projects in roads and highways, sub-urban metros and airports to create jobs, a necessity at the current juncture. It will also generate demand for steel, cement, power, commercial vehicles and capital goods.
– Increase exports: Union Budget should allocate a suitable amount for the market intelligence cell to regularly conduct market studies and understand the dynamics of global trade, barriers to trade and opportunity for market entry across sectors to increase exports. The government must also support campaigns in foreign markets to build brand India and promote Make in India products.
– The government should increase the disinvestment target from Rs 90,000 crore set in the interim Budget to Rs 150,000 in the upcoming FY20 Budget. Reports indicated that Niti Aayog has prepared a list of over 50 public sector enterprises (PSEs) and their idle asset – land, industrial units, etc. – that are ready to be monetised.
– Sectors that generate employment such as textiles, leather, gems and jewellery, footwear and toys should be incentivised with benefits like subsidised land, duty-free imports and tax holidays.
– Scientific research is the key to innovate and the industry needs tax incentives to encourage expenditure. Similar to Make in India and the Startup initiative, an innovation and scientific research initiative should be given equal weight. It is recommended that weighted deduction under the Income Tax Act, 1961 to various modes of scientific research expenditure be restored. Further, innovation and digitisation in service sectors should be incentivised for expenditure incurred on scientific research.
– Reduction in corporate tax to 25 percent in line with the global corporate tax rate structure between 15-25 percent. The reduction in tax will spur domestic investment and make India globally competitive.
– Direct tax exemption announced in the interim Budget FY019-20 should continue, to stimulate household consumption and savings. Apart from the tax exemption for individuals with annual income less than Rs 5 lakh, FICCI recommends the imposition of the highest tax rate of 30 percent for incomes over Rs 20 lakh per annum. Overall deduction limit under 80C, 80D and housing loan interest should be enhanced so that households have more disposable income.
