• Notification Date: 27-01-2024
• Notification No: N/A

Union Budget 2024: Major Recommendations in the Forthcoming Interim Budget

Accelerating capital expenditure, speeding up the divestment process, and expanding the scope of the PLI scheme are some of the proposals put forward by the Confederation of Indian Industry (CII) for the upcoming Interim Budget 2024. 

The industry body shared its Budget wishlist underlining steps that will propel India's economy towards the developed economy goal by 2047. 

Finance Minister Nirmala Sitharaman will present the Union Budget which is going to be a vote-on-account budget on February 1. All eyes will be on the finance minister as the Budget is likely to list out measures that will further strengthen the growth agenda of the Modi government. The Interim Budget is likely to have an enhanced focus on the rural and agriculture sector as the Modi government eyes a third term in office. 

Some of the Major Recommendations in the CII Budget 2024: 

1. Capex Bazooka: One of the major factors behind India's stellar growth numbers has been the Modi government's continued focus on increased spending on roads, airports, railway tracks, and bridges. The CII Budget wishlist seeks this focus to continue and recommended an increase by at least 20% to Rs 12 lakh crore. 

2. Fiscal consolidation: The FM should focus on balancing fiscal consolidation with economic growth. The fiscal deficit target should be trimmed to around 5.4% of GDP for FY25. 

3. Rationalise GST: The industry body pointed towards streamlining the GST structure by pruning the tax to a three-rate structure, with a low rate for essentials, a standard rate for most goods, and a high rate for luxury and demerit goods. 

4. Speed up disinvestment: CII proposed a process that will help put the asset sale programme back in the fast lane. The model entails prioritising those PSEs where investor interest is high. It sought a three-year schedule for disinvestment of state-run enterprises. 

5. Boosting manufacturing: The industry body proposed extending the sunset date of the concessional rate of 15 percent tax for eligible manufacturing units to March 31, 2025. The CII also recommended expanding the PLI scheme to labour-intensive sectors, such as apparel, toys, and footwear to boost employment generation. 

6. More urban jobs: To boost urban employment, the industry body suggested the start of a few pilots for the Urban Employment Guarantee Program with a focus on high-unemployment areas. 

7. Reducing tax litigation: The CII quoted government estimates to show that around Rs 20.8 trillion was locked in income-tax disputes as of 2021-22. That is nearly 9% of India's nominal GDP. It recommended reducing tax litigations by improving dispute redressal mechanisms such as the Faceless Appeals, Advance Pricing Agreement (APA) mechanism, Board for Advance Ruling (BAR), and Dispute Resolution Scheme (DRS). 

8. Ease of Doing Business: India has steadily progressed on the doing business index under the Modi government. The CII has recommended that all business regulatory approvals should come through the National Single Window System (NSWS) in a time-bound manner. It also expected a further decriminalising of business-facing laws and strengthening dispute resolution mechanisms. 

9. Fixing India's logistics: The CII recommended timely implementation of the National Logistics Policy which focuses on lowering the cost of logistics in India to a level at par with developed countries. It also sought phasing out the cross-subsidization of railway passenger fares by freight. 

10. Boosting housing demand: The CII proposed extending the interest subvention scheme for low-cost housing to cover total housing costs of up to Rs 35 lakh instead of Rs 25 lakh at present.