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Budget 2024: Industry players suggest govt to simplify tax system, give relief to middle class

The industry has urged the Finance Minister to reduce corporate taxes, phase out tax exemptions, and broaden the tax base to promote economic growth.

Edited By: Ashesh Mallick @asheshmallick07 New Delhi Published on: July 09, 2024 13:48 IST
Budget 2024
Image Source : INDIA TV Budget 2024

Budget 2024: In the general budget for the fiscal year 2024-25, the focus should be on providing relief to taxpayers, especially those in the lower-income group, to boost consumption, Industry leaders suggested to Finance Minister Nirmala Sitharaman. Sitharaman is set to present the full budget for 2024-25 on July 23, which will be the first major policy document of the Narendra Modi 3.0. The industry has also urged the Finance Minister to reduce corporate taxes, phase out tax exemptions, and broaden the tax base to promote economic growth.

Simplify the tax system

Finance Minister Nirmala Sitharaman is scheduled to present the full Budget for fiscal 2024-25 on July 23 which will be the first major policy document of the new government.

The industry also urged the finance minister to lower corporate tax, phase out tax exemptions, and broaden tax base to boost economic growth.

"Rationalise and simplify the tax system to improve compliance and promote investment. Consider measures such as reducing corporate tax rates, phasing out tax exemptions, and broadening the tax base to make the tax regime more efficient and equitable," Assocham said.

Rating agency ICRA said the government is likely to set a fiscal deficit target at 4.9-5 per cent for FY25, as against 5.1 per cent estimated in the Interim Budget on February 1, without compromising the capital expenditure target of Rs 11.1 lakh crore.

"While favourable developments on the revenue front portend positively for the fiscal dynamics in FY2025, ICRA believes that fiscal consolidation will turn quite challenging beyond the current fiscal," the rating agency said.

Mayank Gupta, co-founder and COO of Zopper Insurtech said the Budget is expected to focus on policies to promote economic growth and offer relief especially for the lower income brackets to stimulate consumption.

"From the point of view of insurance, we suggest amending section 80C of the Income Tax Act to permit a greater limit on insurance premium payments, thereby encouraging more individuals to buy insurance products.

Additionally, there should also be an allowance of deduction for term life insurance under the new tax regime," he said.

Anish Mashruwala, partner, JSA Advocates and Solicitors said NBFC sector is expecting some ease of doing business considering the multitude of regulatory compliances.

"Of course a balance needs to be struck in terms of oversight and hopefully this is something that the government ably considers," Mashruwala said.

Rumki Majumdar, economist, Deloitte India suggested that the government must expand the scope of PLI schemes, especially for sectors that can create more jobs, such as textiles, handicraft and leather.

The schemes must continue in sectors that have seen success, such as electronics, auto and semiconductors, Majumdar added.

On expectations from the finance minister, Vishal Goel, managing director, RX Propellant said the life sciences sector has immense potential and has been drawing global players to not only leverage the strength in contract manufacturing but also establishing global capability centres (GCCs).

"We are optimistic that the upcoming budget announcement will prioritise the life sciences sector, enhancing investment flows and fuelling innovation and success in India," Goel said.

Pankaj Sharma, CEO of Religare Finvest expects measures to reduce financing cost through interest rate subsidy, ease access to credit, especially for new to credit entrepreneurs through policy measures and comprehensive tax relief for the MSME sector.

"Investment in digital infrastructure and skill development is crucial to empower MSMEs with latest technology and boost productivity," Sharma said.

Assocham has also suggested structural reforms in the agriculture sector to enhance productivity, market access, and income opportunities for farmers. It also suggested promoting contract farming, investing in agri-infrastructure, facilitating value chain integration, and encouraging diversification into high-value crops.

(With PTI inputs)

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