Budget 2016: India Inc seeks more public spend in infrastructure, rural sectors

NEW DELHI: Some of the big-ticket items on India Inc’s wish list ahead of the Union budget for 2016-17 include big boost to public spending, no slippage in fiscal consolidation, cut in corporate tax rate, calibrated phase-out of tax exemptions, overhaul of tax administration and clarity in tax policy. Industry chambers want the government to step up public spending in infrastructure and rural sectors to give a big demand push to the economy.

“Capital expenditure on key projects in sectors such as roads, railways, irrigation and power should be increased substantially,” CII president Sumit Mazumder said. Ficci president Harshavardhan Neotia said, “There’s a need for government to increase public spending after which the private investment will follow. There’s a need to create a demand push.” The industry bodies cautioned though that this should not be done at the cost of slippage in fiscal deficit.

“At the same time, the fiscal deficit should not be allowed to increase, as this would put pressure on interest rates, which have just started to soften,” the Confederation of Indian Industry said, pitching for greater implementation of direct benefits transfer and steady reduction in the fuel subsidy bill. Fertiliser subsidy should be paid directly to farmers as cash transfers, it said.

In the customary pre-budget consultations with finance minister Arun Jaitley on Wednesday, industry bodies led by CII, Ficci and Assocham sought clarity in the government’s plan to cut corporate taxes and phase out exemptions given to specific sectors. CII said the corporate tax rate be cut to 22% from 30% now while Ficci pitched for reduction in minimum alternate tax rate.