Incentives to manufacturing, tax cuts among major expectations: ASSOCHAM
In a pre-budget survey, ASSOCHAM underlines main concerns of industries and expects focus on investments, incentives and tax cuts from upcoming budget
Parul January 11, 2023
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Continued focus on investment in infrastructure, further incentivising manufacturing and sustained efforts in ‘Ease of Doing Business’, pushing through disinvestment and leaving more money in the hands of middle and lower middle class people are amongst the major expectations of India Inc, as brought out by an ASSOCHAM pre-Budget survey.
The survey, covering more than 400 people from 40 plus cities across the country, pointed towards the industry being 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.
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Despite global challenges, it is expected that the Indian economy is likely to grow by 6.8-7 per cent 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 per cent in the current fiscal year and 6.1 per cent in the next.
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.
The tax rates for individuals have not been changed since FY 2017-18, apart from the new tax regime, which is subject to onerous conditions. Accordingly, the majority of the respondents suggested reducing the effective rate of personal income tax.
The current capital gains tax structure is too complicated. Therefore, “we need to re-look at the capital gains tax structure in terms of the rates and the holding periods. There should be alignment in the rates of taxation across all asset classes and the holding period across all asset classes”, it said.