Economy

Industry seeks spending on infra, sops for jobs & focus on rural economy

A section of industry captains and business tycoons has suggested Finance Minister Nirmala Sitharaman to focus on measures to accelerate job creation and broaden the tax base by rationalizing GST and personal income tax slabs, so that consumption could receive a big boost from the next Union Budget. Finance Minister has started a consultation process with sectoral experts for the forthcoming Union Budget 2023-24.

On Monday, industry leaders and experts in infrastructure and climate change suggested a slew of measures including increased spending on infrastructure, focus on private investment, sops for sectors that create additional jobs for the youth, under pre-budge consultation process.

Talking to media, CII president Sanjiv Bajaj said, owing to the geo-political uncertainties prevailing globally, we must broaden our economy by creating new sectors of growth and also try to drive employment generation. Our policies should be such which bolster domestic demand, inclusion and growth prospects. Industry captains also asked for a continuous concessional tax regime for the manufacturing sector and help channelize funds into the green economy.

Such suggestions and recommendations have come amid speculations that the uncertainties the global economy is facing, may have some negative impacts on India also. However, at the same time, the industry experts did accept that the Indian economy is doing well, but exports have started getting effected by the global growth slowdown after a stellar performance last fiscal.

Representatives from industry bodies and a few sectors like infrastructure and climate change, also suggested the finance minister to focus on rural infrastructure which could sufficiently help to generate employment in rural areas, that would result in rural demand boost. Another industry body FICCI has also called for an emphasis on strengthening physical, social and digital infrastructure.

It’s a convention that the finance minister kicks off a consultation process with industry experts, business leaders, representatives from business chambers in the process of finalizing the budget. It was an online interaction with industry leaders.

Presently, the global economy is facing double whammy- slow growth rate and rising inflation. Major countries of the world are forced to raise the interest rates to fight rising inflationary pressures, which tend the put more pressure on their economic growth. Hence, a number of financial organizations have predicted a slowed growth for the global economy.

Rating agency the Standard and Poor (S&P Global) has forecast a decline in global growth from 3.1% to 2.4% in 2023, led by especially the United states of America and countries from Europe, who are also facing severe energy crisis, owing to Russia and Ukraine conflict. Aggressive monetary tightening across the globe because of inflationary pressures is making things worse for them. The US Fed has cumulatively raised rates by 375 basis points till date.

 

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