New Delhi: Income tax relief for the people in the lowest slab may need to be considered in the upcoming full Budget for 2024-25 considering the high levels of inflation, according to newly-elected CII President Sanjiv Puri.
In an interview with PTI, he also suggested creation of an institutional platform for consensus building between the Centre and states to successfully carry out all reforms, including those related to land, labour, power and agriculture.
The industry body also said it does not see compulsions of coalition politics hampering the reforms in the third term of Prime Minister Narendra Modi. In stead, it believes that the performance of Indian economy and the success of policies in the previous two stints would set the base to accelerate the process.
”Broadly, I would say at this point in time it is public capex, adherence to fiscal glidepath, roadmap for investment in the social infrastructure, green fund and greater investment in the rural sector. These are the broad principles,” he said when asked about CII’s expectations from the upcoming full Budget for 2024-25.
The wholesale inflation rose for the third consecutive month in May at 2.61% because of the prices of food articles, especially vegetables and manufactured items.
It was -3.61% in May 2023.
Earlier this month, RBI Governor Shaktikanta Das said the Reserve Bank of India (RBI) may consider ‘further policy actions’ only if it is confident that headline inflation stays at 4%.
Das said it is the central bank’s core objective to align the inflation rate with the 4% target and added that no action on rates will be possible till the RBI is confident of it remaining at or below 4%.
As per CII’s estimate, Puri said inflation is ”probably going to be around 4.5% this year” on the back of an expected good monsoon, leading to moderation of food inflation.
On the tax side, he added, ”What we are suggesting is that the simplification process should continue. There are certain suggestions relating to capital gains, which are different for different instruments. Can it be rationalised?” Puri further said there are some operational difficulties in TDS (tax deducted at source) and multiplicity of rates, and CII would prefer simplifying these.
”…over a period of time as far as customs is concerned, we should move to a three-tier structure, primary at the lowest level, intermediates in between and then the finished goods and all over a period of time should be moderate rates with some exclusions, as deemed appropriate,” he added.