NEW DELHI: With the continuing slowdown, India Inc wants the government to focus on consumption and investment in its upcoming budget, even if it means deviating slightly from the fiscal path.
During pre-budget consultations that began last month, revenue secretary Ajay Bhushan Pandey met representatives from India Inc to hear their recommendations.
“Pre-budget memorandum recommendations are mainly along the pillars of creating fiscal space for investment in infrastructure, enhancing rural demand, boosting private investments, augmenting government revenue and bridging the trust deficit, improving business sentiment,” the Confederation of Indian Industry (CII) said in a statement after the meeting.
Interestingly, India Inc does not mind deviation from the fiscal path and has recommended adoption of expansionary fiscal policy to allow fiscal deficit to increase by 0.5 per cent to 0.75 per cent of GDP beyond the FRBM targets, which, they claim will give the government additional fiscal space of about Rs 1.1-1.6 lakh crore.
“This additional fiscal space should be used for investing in capex, particularly in infrastructure. There should be a glide path to return to the FRBM target over a period of 2-3 years,” CII added. Another recommendation was to boost rural demand by focusing on rural schemes like PM-Kisan.