(MENAFN- KNN India)
New Delhi, Dec 31 (KNN) industry bodies urged the Finance Ministry to consider personal income tax reductions and fuel duty cuts during pre-Budget consultations on Monday, emphasising the need to boost disposable income amid weak consumption trends.
The discussions, attended by the Finance Minister and senior ministry officials, focused on challenges facing the economy, particularly those affecting micro, small, and medium enterprises (MSMEs).
Confederation of Indian Industry (CII) President Sanjiv Puri highlighted concerns about Chinese product dumping and climate-related challenges impacting food security and inflation.
The CII proposed specific measures to stimulate employment-intensive sectors such as garments, footwear, tourism, and furniture, while advocating for income tax relief on earnings up to Rs 20 lakh through adjusted marginal rates. The industry body also recommended reducing excise duty on petroleum products to enhance consumer spending power.
Customs clearance delays emerged as a significant concern during the consultation. The Federation of Indian Chambers of Commerce & Industry (FICCI) pointed to extensive Bureau of Indian Standards (BIS) certification requirements as a major bottleneck.
CII proposed a three-tier customs tariff structure to facilitate India's integration into global value chains, suggesting rates of 0-2.5 percent for inputs, 2.5-5 percent for intermediates, and 7.5 percent for final goods, with certain exceptions.
ASSOCHAM President Sanjay Nayar addressed MSME financing challenges, noting that despite policies promoting collateral-free loans, banks often require personal property collateral and impose higher interest rates.
He advocated for mandatory disclosure of collateral-free loan data by banks and suggested additional budget allocation to enhance credit flow to MSMEs, similar to the successful Credit Guarantee Fund Trust initiative launched during COVID-19.
The consultations also addressed broader social trends, with FICCI noting the increasing demand for childcare and elderly care services due to the rise in nuclear families and dual-income households.
These discussions took place against the backdrop of record-high imports in November, which reached nearly USD 70 billion, widening the goods trade deficit to USD 37.8 billion and intensifying concerns about Chinese goods dumping amid declining exports to European markets.
(KNN Bureau)
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