Budget rests on provisions of good governance and trust: Mr Tuhin Kant Pandey, Finance and Revenue Secretary, Ministry of Finance at CIi Post Budget session
Most of the tax proposals in the budget are based on the precepts of good governance which is evident in areas such as ease of doing business, ease of compliance, technology and trust. In this way, the Budget reinstates the agenda of trust first which would provide the requisite impetus to sustain our growth momentum amidst global headwinds said Mr Tuhin Kanta Pandey, Finance and Revenue Secretary, Ministry of Finance addressing the post budget interactive session organized by the Confederation of Indian Industry (CII) at New Delhi today.
Elaborating further, Mr Pandey averred that while much has been done to accelerate the pace of reforms, there is much more that is needed in terms of addressing the unfinished reforms agenda. He encouraged industry to inculcate the animal spirits and boost investments to propel growth and employment. The government is ready to lend its assistance in whichever way possible to resolve any concern impacting industry, Mr Pandey added.
Mr Ajay Seth, Secretary, Department of Economic Affairs, while underscoring the significance of partnership with industry associations such as CII in Budget preparations, sought assistance from industry in terms of modalities of implementation, on five big ideas proposed in the Budget. Firstly, on what should be the modalities for taking forward the Manufacturing Mission - Furthering “Make in India” initiative announced in the budget. Should it be incorporating a sector by sector and state by state approach; Second, what should be the terms of reference for the High-Level Committee for Regulatory Reforms. Whether the committee should investigate the ground level or take the satellite approach. Third, while taking forward public private mode of partnership, industry proposals are required on how it should be done differently and better and how to get it right this time. Fourth is related to partnership in R&D and innovation and fifth is focussed on involvement of private sector in energy transition and working with industry on nuclear energy.
Mr Nagaraju, Secretary, Department of Financial Services, dwelt extensively on the landmark announcements in the budget on the financial sector which were focussed facilitating enhancement of credit availability and credit flows to stakeholders in the economy. Some of the announcements made in the Union Budget such as enhanced credit guarantee cover to micro and small enterprises and startups; credit card for micro enterprises; fund of funds for startups; scheme for first time entrepreneurs, among others would boost the ecosystem for MSEs and startups and augment employment and exports. Similarly, the Partial Credit Enhancement Facility’ for corporate bonds for infrastructure would defend the bond market and ensure that new borrowers access credit. At the same time, Swamih fund II, simplification of KYC registration and raising the FDI in insurance sector are all timely and much needed initiatives, stated Mr. Nagaraju.
Similar sentiments also found a resonance in the remarks of Dr. Arunish Chawla, Secretary, DIPAM who maintained that the objective of his department was premised on five elements. This included (i) optimise the value of PSE not just for the government but also for other stakeholders such as minority shareholders and the public who had invested their savings; (ii) bringing together elements of corporate performance (iii) clear and timely communication (iv) ensuring that dividend policy is sustained and it creates value for small investor and (v) focus on calibrated asset monetisation which includes asset sales, public offering, strategic disinvestment, among others.
A calibrated approach and a well thought out strategy would be crucial before contemplating disinvestment as trade-offs are involved in terms of getting sustained revenue, appropriate market conditions and appetite of investors. Hence the government would put its best foot forward, said Dr. Chawla.
Dr. Anantha Nageswaran, Chief Economic Advisor to the Government of India, maintained that there is a perception that the private sector has not been investing as much as anticipated. This situation could be understood against the backdrop of uncertainties that the private sector is grappling with such as post Covid-19 demand slowdown, interest rate tightening after several long years of interest rate easing etc. However, data will soon give a different picture as towards the end of this month, MOSPI will release a granular breakdown of capital formation, which shows that the private sector has indeed been investing.
Dr. Anantha Nageswaran, further underpinned that significance of energy security and energy transition and the role of nuclear energy in ensuring long term growth. Overall, the focus of the Budget is on capital formation, energy security, employment and skilling, he said.
Mr Sanjay Agarwal, Chairman, Central Board of Indirect Taxation, spoke extensively on effecting simplification and efficiency in the tax system, facilitating ease of doing business and ensuring domestic and global competitiveness. He said that the thrust of the budget was on promoting value addition in domestic manufacturing, enhancing exports and providing relief to the common man by reducing duties on cancer drugs etc.
He dwelt on rationalising customs duty and bringing it closer to ASEAN levels, reducing the number of tariff lines, tariffication of rates on critical minerals, among others.
Mr Ravi Agarwal, Chairman, Central Board of Direct Taxes, stated that the direct tax proposals have been made with the goalpost of being Prudent where P stands for prompt response to taxpayers; R for rule based; U for user friendly, D for data driven; E for enabling environment and T for technology and transparency.
Mr Rajiv Memani, President Designate, CII, speaking at the interaction mentioned that the two stand out features of the Union Budget are the long-term boost to consumption through the reduction in income tax rates and the focus on ease of doing business.
Mr. Chandrajit Banerjee, Director General, CII, while welcoming the delegates, observed that many of the suggestions made by CII have found a place in the Union Budget.
New Delhi
3 February 2025