New Delhi: Mr Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry has appreciated and congratulated Hon’ble Finance Minister Smt Nirmala Sitharaman while releasing the report on PHDCCI Analysis on Union Budget 2021-22 conducted by PHD Research Bureau, research arm of PHD Chamber of Commerce and Industry
Mr Sanjay Aggarwal in a press statement issued here today said that the budget has considered 75% of the suggestions made by the PHD Chamber to Ministry of Finance.
PHDCCI had suggested a 10 pronged strategy to the Hon’ble Finance Minister, Smt. Nirmala Sitharaman for the Budget 2021-22 to rejuvenate the economic growth trajectory of the country, which included (1) refueling consumption and demand, (2) encouraging the private investments, (3) large scale infrastructure investments, (4) establishing DFIs to fund industrial and infrastructural investments, (5) strengthening MSMEs, (6) reducing the costs of doing business, (7) ease of doing exports, (8) increasing Tax to GDP ratio, (9) agriculture & rural sector must be at the forefront and (10) effective reforms in social infrastructure.
Out of the 10 suggestions made by Industry body, PHD Chamber to Ministry of Finance, 7 suggestions including large scale infrastructure investments; expansion of National Infrastructure Pipeline; setting up a Development Finance Institution (DFI); strengthening of the MSMEs though increased allocations and revisions in custom duties; implementation of government order on reduction of performance bank guarantees (PBG); reduction in cost of doing business, especially logistics cost, dedicated freight corridor projects; and reforms for encouraging the private investments in the country have been considered in the budget, said Mr Sanjay Aggarwal.
Whereas, PHD Chamber’s suggestions including, ease of doing exports through Mega Investment Textiles Parks (MITRA) scheme, enlarged scope of Operation Green Scheme and revisions in custom duties; dedicated reforms for agriculture & rural sector; and strengthening of social infrastructure have been partly considered in the budget, said Mr Sanjay Aggarwal.
Going ahead, we look forward to the effective implementation of the reforms considered at the ground level and kind consideration of the remaining suggestions in future course of time, said Mr Sanjay Aggarwal.
The Union Budget 2021-22 presented by Mrs Nirmala Sitharaman, Hon’ble Finance Minister is a historic budget and has brought string of positive surprises , considering the aspirations of all sections of the society for the improvement of standards of living of the people and ease of doing business for the industry across the segments, said Mr. Aggarwal
The focus of budget on six pillars, including Health and Well-Being, Physical and Financial capital and infrastructure, Inclusive Development for Aspirational India, Reinvigorating Human Capital, Innovation and Research & Development, and Minimum Government, and Maximum Governance is highly encouraging and would go a long way to build a New India, said Mr Sanjay Aggarwal.
PHD Chamber Suggestions: Analysis of the Union Budget 2021-22
|PHD Chamber’s Suggestion
(10 Pronged Strategy)
|Refueling consumption and demand
|· The budget has focused on infrastructure development, which will reap significant multiplier effects through demand creation and employment generation.
· The NIP was launched with 6835 projects; the project pipeline has now expanded to 7,400 projects
· The budget has proposed creation of the institutional structures (DFI); a big thrust on monetizing assets; and enhancing the share of capital expenditure in central and state budgets.
· 7 projects worth more than Rs 2,000 crores will be offered by the Major Ports on Public Private Partnership mode in FY21-22.
|Encouraging the private investments
|· The budget has proposed to make notified Infrastructure Debt Funds eligible to raise funds by issuing tax efficient Zero Coupon Bonds.
· The Government would support the development of a world class Fin-Tech hub at the GIFT-IFSC
· An Asset Reconstruction Company Limited and Asset Management Company would be set up to consolidate and take over the existing stressed debt and then manage and dispose of the assets to Alternate Investment Funds and other potential investors for eventual value realization.
· Aggressive disinvestment strategy, with proposed plan of privatization of two Public Sector Banks and one General Insurance company in the year 2021-22 along with issuing the IPO of LIC.
· Proposal to extend the capital gains exemption for investment in start-ups by one more year – till 31st March, 2022.
|Front loading of infrastructure investments
|· The NIP was launched with 6835 projects; the project pipeline has now expanded to 7,400 projects. Around 217 projects worth Rs 1.10 lakh crores under some key infrastructure Ministries have been completed.
· The Government has announced a huge capital expenditure for the year 2021-22. The budget support for the capital expenditure has been increased from Rs 4,39,163 crore in 2020-21 to Rs 5,542,36 crore in 2021-22.
|Establishing DFIs to fund industrial and infrastructural investments
|· The budget has proposed to introduce a Bill to set up a DFI. The budget has provided a sum of Rs 20,000 crores to capitalise this institution. The ambition is to have a lending portfolio of at least Rs 5 lakh crores for this DFI in three years time.
|· The Budget has provided Rs 15,700 crores to MSME sector, more than double of previous Budget Estimate.
· To ensure faster resolution of cases, the budget has proposed that NCLT framework will be strengthened, e-Courts system shall be implemented and alternate methods of debt resolution and special framework for MSMEs shall be introduced.
· Revision in custom duty on various products to support the MSMEs and provide them with level playing field.
|Reducing the costs of doing business
|· To bring down the logistic cost, the budget has proposed Western Dedicated Freight Corridor (DFC) and Eastern DFC and various other future dedicated freight corridor projects.
· To reduce the litigation cost, the budget has proposed to strengthen the NCLT framework, implement the e-courts system and alternate methods of debt resolution and special framework for MSMEs.
· To reduce the compliance cost, it has been assured that the measures will be taken to smoothen the GST further, and remove anomalies such as the inverted duty structure
|Ease of doing exports
|· Revisions in Custom Duty Policy to fulfil twin objectives of promoting domestic manufacturing and helping India get onto global value chain and export better.
· Proposed a scheme of Mega Investment Textiles Parks (MITRA) to be launched in addition to the PLI scheme. 7 Textile Parks to be established over 3 years.
· To boost value addition in agriculture and allied products and their exports, the scope of ‘Operation Green Scheme’ will be enlarged to include 22 perishable products.
· Budget has proposed rationalizing exemption on import of duty-free items as an incentive to exporters of garments, leather, and handicraft items
|Increasing Tax to GDP ratio
|To make the tax payers more confident and thereby increase tax compliance:
· The time-limit for re-opening of assessment is being reduced to 3 years from the current 6 years.
· Budget has proposed to constitute a Dispute Resolution Committee for them, which will be faceless.
· To further ease filing of returns, details of capital gains from listed securities, dividend income, and interest from banks, post office, etc. will also be pre-filled in icome tax return form.
|Agriculture & rural sector must be at the forefront
|· Budget has proposed to enhance the agricultural credit target to Rs 16.5 lakh crores in FY2022.
· Enhanced allocation to the Rural Infrastructure Development Fund from Rs 30,000 crores to Rs 40,000 crores.
· Issue of record of rights to property owners in villages under SWAMITVA Scheme to be extend to cover all states/UTs in FY2022.
|Effective reforms in social infrastructure
|· 100 new Sainik Schools will be set up in partnership with NGOs/private schools/states
· To create formal umbrella structures in various research institutions, universities, and colleges supported by the Government of India in 9 cities, while also retaining their internal autonomy.
· Budget has proposed set up a Central University in Leh.
· Over Rs 3,000 crores will be provided for skill development.
· The budget has set a target of establishing 750 Eklavya model residential schools in tribal areas
· Budget outlay for Health and Wellbeing at Rs 2,23,846 crores in BE 2021-22.
· Provision of Rs 35,000 crores for Covid-19 vaccine in BE 2021-22.
· Launch of the JalJeevan Mission (Urban).