NEW DELHI: Union Finance Minister Nirmala Sitharaman will initiate pre-Budget consultations on Monday, amidst an ongoing slowdown. Starting with members of financial sector and capital markets, she will in due course meet all stakeholders.
Sitharaman is likely to present her second Budget for the NDA 2.0 regime on February 1. With the GDP growth falling below 5 per cent in the September quarter of the fiscal, the Union Budget 2020-21 is going to be a tightrope walk for Sitharaman. She will have to balance between fiscal prudence and the need to loosen purse strings to boost investment.
“This year is challenging. The initial focus will be to boost demand and give more savings in the hands of public to improve demand from consumers. As already indicated, some relief in personal income tax is expected,” a senior finance ministry official told TMS.
With the customary pre-Budget consultations beginning from Monday, the finance minister will seek inputs from various stakeholders including industry bodies, farmers’ organisations and economists for reviving consumption and growth.
According to the Ministry of Finance, Sitharaman will meet stakeholder groups of New Economy: Start-ups, Fintech and Digital Sector on Monday morning, and the financial sector and capital market representatives later in the day.
Industry sources said the government has sought their views on matters like ease of doing business, regulatory environment impacting private investments, export competitiveness, role of states (delayed payments, contract enforcement), and revival of private investments and growth.
“While a major relief has already been doled out for the corporates in terms of corporate tax cuts, the Centre is likely to focus on sectors that are reeling under pressure; for instance, telecom, infrastructure, aviation and auto. Also, some relief for employment-intensive sectors is expected,” the official added.
Industry bodies have demanded that incomes up to Rs 5 lakh should be exempt from tax for individual taxpayers from the current Rs 2.5 lakh to spur demand for goods and services. They also demand a hike in the overall deduction limit to at least Rs 3 lakh (from the current Rs 1.5 lakh under Section 80C of the Income Tax Act).
Meanwhile, Sitharaman is likely to meet industry chambers on December 19. Sources said the consultations will go on till December 23. The Union Budget 2020-21 will be a litmus test for the government’s economic policies and will be keenly watched by market participants for numbers on key macroeconomic indicators.
The pre-Budget consultations that will begin on Monday will go on till December 23. The FM will meet stakeholder groups of start-ups, fintech and digital sector on Monday morning, and the financial sector and capital market representatives later in the day.