Assocham survey calls for tax cuts, more money in hands of people

A survey conducted by the industry body Assocham has brought to the fore major expectations of India Inc from the upcoming budget. According to the findings of the pre-budget survey conducted by the association, continued focus on investment in infrastructure, incentivising manufacturing and sustained efforts towards ease of doing business', are the key expectations of the India Inc. The survey finds out that the corporate world also wants the government to leave more money in the hands of the middle and lower middle class people.

The survey covered more than 400 respondents from 40 plus cities across the country and pointed out that the industry is optimistic about economic recovery and embracing the 'new normal' following the Covid period, challenging geo-political situation and slowdown or recession fears in several important economies of the world.

More than two third of the respondents in the survey stated that the government should reduce the tax rates in income tax and rework the exemption limit leaving more disposable income in the hands of consumers. "The economy needs both robust demand across different sectors. This would eventually lead to newer investment, giving a double push to growth that would be a catalyst for job creation on a large scale,” ASSOCHAM secretary general Deepak Sood said.

The tax rates for individuals have not been changed since 2017-18, apart from the new tax regime, which is subject to onerous conditions, said an Assocham release adding that the majority of the respondents suggested reducing the effective rate of personal income tax.

On the economic growth front, the industry is hopeful that despite global challenges Indian economy is likely to grow by 6.8-7% in the medium term, buoyed by a revival in the capital formation cycle. "This growth projection is in line with the International Monetary Fund's forecast of 6.8% in the current fiscal year and 6.1% in the next," Assocham release said.

Amid the continuing fear of the Covid around the world, the government should also support the healthcare sector in the Union Budget 2023-24, followed by Education, MSME & Agriculture to provide a cushion to the economy and ensure that no disruptions are caused to the supply chain across different economic and social sectors.

"A growing economy demands a constant supply of skilled manpower. Vocational education and skill development programs have been a priority in last year’s budget as well to boost employment in the country. A similar priority in addressing the unemployment issue through skill upgradation should continue," Assocham said on the survey in a release.

"An overwhelming number of respondents also want a boost to the infrastructure and housing sector as well as giving further incentives to the companies to hire more people," it said.

"The government has taken much-needed steps to support the Indian industry and push post covid recovery of the economy. The introduction of PLI schemes is one of the important measures taken by the Government. A view emerged that the scheme is creating a lot of buzz and more and more companies are committing new investment in manufacturing, taking advantage of the scheme," Assocham said.

The survey has also called for addressing the issue of delayed payments to the small and medium industries. "The Government has been proactive to ensure to provide all benefits- the ECLGS scheme, digitised SME loans, and duty exemptions. However, delayed payment remains the main concern for the sector. Reducing the compliance burden and access to the latest technologies at a lower cost should be the way forward for the MSMEs. There has been a demand for extension of the ECLGS," the release said. The survey also called for simplifying the complex structure of the capital gains tax.