The government should kick-start economic recovery and growth by boosting private investment and creating jobs, while prioritizing expenditure on healthcare and infrastructure, top industrialists said on Monday, ahead of the presentation of Union Budget 2021-22.
Industrialists called for a fresh round of fiscal stimulus to support economic growth, in a first ever virtual pre-budget consultation with Union finance minister Nirmala Sitharaman and top officials of the finance ministry.
The Confederation of Indian Industry (CII) recommended a three-pronged strategy for Budget 2021-22 centering around growth, fiscal consolidation and strengthening of the financial sector that would help overcome the impact of Covid-19 on the economy.
“Aggressive disinvestment and monetisation of assets can augment government revenues at a time when tax revenues have fallen sharply. Government expenditure should be prioritized in three areas—infrastructure, healthcare and sustainability. The budget proposals should also address the critical areas of boosting private investment and providing support for employment generation,” CII president Uday Kotak said.
The Federation of Indian Chambers of Commerce and Industry (Ficci) urged the government to consider converging the existing goods and services tax rates to three, to reduce complexity and probability of disputes. “The need to strengthen our healthcare infrastructure has been highlighted by the Covid-19 crisis. The government has already envisaged increasing public spend on healthcare to 2.5% of gross domestic product (GDP) by 2022 from around 1.3% at present. We urge the government to start spending an extra 0.5% of GDP every year on health for the next five years,” Ficci said.
{{/usCountry}}The Federation of Indian Chambers of Commerce and Industry (Ficci) urged the government to consider converging the existing goods and services tax rates to three, to reduce complexity and probability of disputes. “The need to strengthen our healthcare infrastructure has been highlighted by the Covid-19 crisis. The government has already envisaged increasing public spend on healthcare to 2.5% of gross domestic product (GDP) by 2022 from around 1.3% at present. We urge the government to start spending an extra 0.5% of GDP every year on health for the next five years,” Ficci said.
{{/usCountry}}Kotak also urged the government to bring down its stake in public sector banks to below 50% through the market route, barring three-four large lenders such as State Bank of India, Bank of Baroda and Union Bank.
Sitharaman is scheduled to present her third budget on 1 February amid heightened expectations that she will announce fresh measures at a time when the economy is recovering from the adverse effects of the nationwide lockdown imposed to contain the Covid-19 pandemic.