Industry Unveils Budget Wishlist Before FM Jaitley

06 January, New Delhi

Industry chambers Wednesday asked Finance Minister Arun Jaitley to step up public spending to stimulate domestic demand as investment by private players remains below par and exports are declining.

The suggestion was made by major industry chambers like CII, FICCI and ASSOCHAM in their interaction with the FM as part of pre-budget consultations. Industry bodies recommended that capital expenditure on key projects in sectors such as roads, railways, irrigation and power be increased substantially.

Further, PSUS be asked to increase capex, they said. Industry chambers suggested that particular attention be paid to rural demand, which can be supported through spending on rural roads and irrigation.

They recommended increasing allocations on schemes such as the Pradhan Mantri Gram Sadak Yojana and the Pradhan Mantri Krishi Seenchayi Yojana. Such spending would have a much greater impact on the rural economy than spending on subsidies or employment guarantees, the argued.

However, they said that the fiscal deficit target should not be breached. Chambers also stressed the need to widen the tax base and suggested that it be made mandatory for those with annual income above a certain threshold, say Rs 10 lakh, to file I-T returns so that tax evasion could be checked.

They also suggested that the Government use the Infrastructure Finance Companies like IIFCL to rebuild the capacity of the private infrastructure sector by making it easier for them to raise funds. Since IFCs have the necessary expertise, they should also be used as ARCs for the infrastructure sector, helping revive stranded projects, they added.

They said that NIIFIs a good first step but more needs to be done. They recommend that a taskforce on infrastructure finance under JS, Infra be setup to take this forward. Pension and insurance funds should be allowed to invest in any investment grade paper, not just AA, they added.