Financial obligations due to implementation of OROP and 7th CPC Recommendations in the coming financial year – Finance Minister
Finance Minister: Due to various policy measures
undertaken by the present Government, Indian Economy has achieved robust
growth rate despite volatility and uncertainty in global economy; asks
Captains of Indian Trade and Industry to come forward and make increased
Private Investment especially in Infrastructure Sector .
The Union Finance Minister Shri Arun Jaitley said that in the first
half of the Current Financial Year 2015-16, the Indian Economy has
achieved robust growth rate despite volatility and uncertainty in global
economy. He said that this was made possible by a slew of policy
measures undertaken by the present Government including enhanced public
investment, kick starting stalled projects, improving the status of
financial inclusion significantly, improving governance through
systematic changes like open auction of natural resources like coal and
spectrum in a transparent manner, and greater fiscal federalism and
improving business environment through reforms in policies and
regulation among others. Shri Jaitley said that the current level of
growth rate of our economy and sound fiscal fundamentals present better
growth prospects for the next Financial Year 2016-17 as well. The
Finance Minister Shri Jaitley was making the Opening Remarks during his
third Pre-Budget Consultative Meeting with the representatives of
Industry and Trade Groups here today.
The Union Finance Minister Shri Arun Jaitley said that the
Government will continue to expand public spending even during the next
financial year despite the major financial implications of the
recommendations of the 14th Finance Commission which reduced the share
of the Central Government by 10% and its forthcoming financial
obligations due to implementation of One Rank One Pension (OROP) and 7th
Pay Commission Recommendations in the coming financial year. He asked
the representatives of Business and Trade Sector to increase the private
sector spending especially in infrastructure sector.
Various suggestions were received during the aforesaid Consultative
Meeting. Major recommendations include higher investment in irrigation
and rural infrastructure sector as this will increase the spending
capacity of the rural people which in turn will create demand for
various items and increased economic activity. Other suggestions
included focus on disinvestment of public sector undertakings by the
Government to raise additional revenue and to reduce Government
borrowings which, in turn, will make more money available for the
private sector to borrow. Other suggestions included reduction in
subsidy outflows and direct payment of fertilizer subsidy to farmers.
Suggestions were made that 7th Pay Commission recommendations be
implemented in staggered manner and tax collections be increased by
expanding the base. It was suggested that Minimum Alternate Tax (MAT) by
withdrawn in calibrated manner, tax exemptions and allowances be
withdrawn while tax rate may be rationalised in order to bring
transparency, certainty and less discretion to make the tax
administration more transparent and efficient. Tax incentives be given
for use of debit and credit card, payment of utilities be made mandatory
by cheques or through e-payment, clarity of policies by CBEC & CBDT
to its field offices to avoid any discrepancies and discretions in tax
administration and implementation of GST at the earliest.
Other suggestions include measures be taken to revive private sector
investment especially in infrastructure sector through NIIF, use of
Infrastructure Finance Companies like IIFCL to rebuilt the capacity of
the private infrastructure sector by making it easier for them to raise
funds. Bank guarantees be replaced by ‘bid bonds’ or ‘surety bonds’ for
companies which, in turn, will help them getting credit at reduced cost
and removal of cess and surcharges etc.
Other suggestions include measures to attract youth to agriculture
sector by making farming highly mechanized and improving productivity.
For this ‘Agriculture Equipment Banks’ may be set-up, segments of land
be made in three categories, viz, barren land, single crop land and
multi-crop land and separate rules for dealing with each category may be
made.
Start-up parks for attracting young entrepreneurs be set-up on the
line of IT parks. Suggestions were made that in order to ‘Make in India’
and ‘Ease of doing Business’ successful, measures may be taken to
reduce the cost of doing business for which we need to improve
infrastructure and reduce credit cost. To deal with the problem of NPA,
recapitalization of banks be done through offering of shares to public.
As regards tax matters, it was suggested that no appeal should be made
where the two consecutive orders are in favour of the assesse except in
rare situation and assesses may not be asked to deposit in case of first
appeal and be asked to deposit only in case of second appeal.
It was suggested that measures be taken to generate demand in real
estate sector which will in turn boost the steel and cement sectors
which are major sectors for employment generation. Other suggestions
include raise in exemption limit in case of income tax be raised from
Rs. 2.00 lakh to Rs. 5.00 lakh, corporate tax be reduced to 25%, nominal
rate of interest be charged on delayed payments, rationalization of
exemptions and allowances and reduction in tax rates, reduction in
corporate tax be extended to partnership firms etc.
It was suggested that measures be taken to uplift the power sector
which is facing a challenging time, credit to MSME sector be boosted,
Mid Day Meal Scheme may be scrapped due to large scale seepages and
non-transparency in the implementation of the same. Suggestions were
made to boost the exports, especially the MSME exports. It was suggested
to boost e-commerce in mobile payment to achieve the goal of cashless
economy, guidelines be issued for removal of anomalies in case of taxes
being imposed by different States on e-payment and e-commerce. It was
suggested to reduce customs duty on set-top boxes from 10% to 5%,and
media entities be included for carry forward of losses in case of merger
among others.
Along with the Finance Minister Shri Jaitley, the Pre-Budget
Consultative Meeting with the representatives of Industry and Trade
Groups was also attended among others by Shri R.N. Watal, Finance
Secretary, Shri Shaktikanta Das, Secretary, DEA, Dr. Hasmukh Adhia,
Revenue Secretary, Ms. Anjuly Chib Duggal, Secretary, Financial
Services, Shri Amitabh Kant, Secretary, DIPP and Dr. Arvind Subramanian,
Chief Economic Adviser (CEA). The representatives of the Industry and
Trade Groups present during the meeting included Shri Sumit Mazumdar,
President, CII, Shri Sunil Kanoria, President, ASSOCHAM, Shri
Harshavardhan Neotia, President, FICCI, Shri R. Chandrasekhar, Chief
Economist, NASSCOM, Shri Ajay Piraman, Piramal Enterprises Ltd, Shri
S.C. Ralhan, President, FIEO, Shri R Seshasayee, Vice Chairman, Ashoik
Leyland, Shri Ashish Gupta, Consulting CEO, Federation of Associations
in Indian Tourism & Hospitality (FAITH), Shri P.K. Shah, Chairman,
EEPC India, Shri G. Venkatesh Babu, LANCO Anpara Power Ltd, Shri Sangam
Kurade, President, Federation of Indian Micro and Small & Medium
Enterprises (FISME), Shri Abhishek Tiwar, Federation of Indian Women
Entrepreneurs (FIWE), and Shri Girish Srivastava, Secretary General IBF
among others.
Source: PIB News
