New Delhi: Indian Chamber of Commerce (ICC) expects that Union Budget 2021-22 will come as Economic Vaccine for the Indian Economy and steer India with the much needed stimulus to boost demand, consumer confidence and at the same time boost the purchasing power of the people.
Government expenditure would be a critical component for driving demand in the economy. ICC expects announcements towards large public investment and massive infrastructure push that would prompt a boost in demand and generate employment. Health, Rural & Agriculture sector should get higher allocations and targeted schemes.
New employment opportunities for skilled and semi-skilled workers is another challenge which Budget has to address. ICC expects the Budget to offer incentives to industries like textiles, apparel, leather, food processing, construction, retail, etc. to achieve global competitiveness and to support employment creation for millions of unskilled and semi-skilled workers. Another employment intensive sector is real estate. ICC expects the Budget to offer personal tax relief, tax rebate on housing, extension of interest subvention, GST waiver, infrastructure status etc for the realty and easing liquidity for the sector. This would have multiplier impact on the economy.
In line with Atmanirbhar Bharat Abhiyan and Vocal for Local, ICC expects Budget to change customs duties on several goods including furniture raw materials, copper scrap, few chemicals, telecom equipment and rubber products, to promote domestic manufacturing and exports. Similarly, customs duty hike on man-made yarns will promote local manufacturing.
ICC also expects a hike of the Rs 2 lakh tax rebate on housing loan interest rates to at least Rs 4 lakh to generate healthier housing demand especially affordable housing. The last increase in the deduction limit under Section 80C (to Rs 1.5 lakh a year) was in 2014 and a revision is expected. ICC also expects the two percent interest subvention scheme for the micro, small and medium enterprises on loans to be revised to 3% with a coverage of the scheme upto Rs. 300 lakh.
The Budget should also announce setting-up of a national bank for easy access to low-cost funds for infrastructure projects as India has ambitious infra plans. Idea of a bad bank should get due consideration to deal with large NPAs and easing of liquidity, ICC feels.
ICC also expects the Budget to provide an edge to Startups by extending the tax exemption for startup investors for a period of 12 years or till the sale or transfer of such investment, whichever is earlier; easy write off of unsuccessful startup investments etc.
On fund raising front, Govt. should consider Covid Bonds which could support infrastructure investments and stimulate productive sectors, ICC feels.