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Economists Suggests FM To Step Up Capex, Cut Tax In Budget 2023

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According to the economists, considering the high inflation rate, providing a relief on income tax will boost domestic demand. In total, the finance minister has held eight rounds of discussions, beginning with India Inc on 21 November and ending with a round of consultation along with economists on 28 November.

The government is asked by the Economists to level up capital expenditure, rationalise personal income tax and stick to fiscal discipline in the upcoming Budget, on 28 November.

During the finance minister Nirmala Sitharaman led pre-Budget interaction, they also urged her to increase health care outlay and focus on quality job creation.

According to the economists, considering the high inflation rate, providing a relief on income tax will boost domestic demand. In their suggestion, the Centre should continue with long-term loans to states, meanwhile relaxing some of the spending restrictions and handhold them through fiscal management. Its focus should especially be on those with high borrowings.

The meeting was attended by the economists and experts along with N R Bhanumurthy of Dr BR Ambedkar School of Economics University, Ashwani Mahajan of Swadeshi Jagaran Manch, Poonam Gupta of National Council of Applied Economic Research, Monetary Policy Committee member Ashima Goyal, economist Karthik Muralidharan, Aditi Nayar of Icra, Santanu Sengupta of Goldman Sachs, Rahul Bajoria of Barclays, Madan Sabnavis of Bank of Baroda, and Deepak Mishra of ICRIER.

In total, the finance minister has held eight rounds of discussions, beginning with India Inc on 21 November and ending with a round of consultation along with economists on 28 November.

Expectedly, the Budget 2023-24 is to be tabled in Parliament on 1 February.

The finance Ministry said that with more than 110 invitees representing 7 stakeholder groups participated in all 8 meetings till date.

Also, she gave assurance to them on their suggestions to be considered carefully while preparing the Budget 2023-24.

Pic credits: AFP

FM Meets State Finance Ministers For Their Suggestions On Budget 23-24

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The details of the meeting are yet not made public. In order to prepare the annual Budget for the upcoming financial year 2023-24 the formal exercise began on 10 October

Union Finance Minister Nirmala Sitharaman chaired a pre-Budget meeting with the finance ministers of all States and Union Territories to consider their inputs and suggestions for the Budget 2023-24.

The meeting took place at the national capital, on 25 November.

Apart from Sitharaman and state/union territories finance ministers, Union MoS for Finance Pankaj Chaudhary and Bhagwat Karad, Chief Economic Advisor Anantha Nageswaran and secretaries from various arms of union finance ministry and others attended the meeting.

The details of the meeting are yet not made public.

As of now, Sitharaman has chaired various pre-budget consultations group of experts and industry leaders, including the agricultural and food processing industry experts.

The first meeting was held on 21 November.

In order to prepare the annual Budget for the upcoming financial year 2023-24 the formal exercise began on 10 October.

The Budget for 2023-24 is expected to be tabled on 1 February.

Notably, Modi 2.0 government will present last full Budget before the Lok Sabha elections to be held in April-May of 2024.

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CAs Must Ensure Adherence To Fair Practices: FM Sitharaman

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The finance minister highlighted that another important objective is developing sustainability reporting standards. According to her accountants must adhere to fair and transparent practices

The finance minister of India, Nirmala Sitharaman said that chartered accountants must adhere to transparent and fair practices, on 18 November. In order to build trust in financial statements, it is important for them to be independent.

She said that the fundamental requisite for corporate governance according to her is accounts which must reflect transparency, clarity and accountability in a company’s financial affairs.

According to her accountants must adhere to fair and transparent practices. The independence of Chartered Accountants is crucial and significant to develop trust and integrity in their financial statements, she added.

Addressing a virtually at the World Congress of Accountants 2022 event happening at Mumbai, she said that the responsibility of chartered accountants is not only limited to shareholders, however to other stakeholders too which includes financial institutions and the government.

Also, the finance minister highlighted that another important objective is developing sustainability reporting standards. She noted the increasing need for technology adoption ans said that it will make a huge difference in a way in which financial information is gathered, processed, and reported.

Blockchain, artificial intelligence, machine learning, cloud computing and data analytics are all going to enhance accounting. The decision-making will majorly be machine-driven in the future, she said while concluding her address.

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Sitharaman Asks AIIB To Raise Investments In Clean Energy, Infra Sector

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India has embarked on the path of a self-reliant economy which led to a successful mitigation of the negative effects of the pandemic. She said this while addressing the annual meeting of the board of governors of Asian Infrastructure Investment Bank (AIIB). AIIB also needs to keep a special focus on education and health and digital infrastructure in order to achieve a sound impact and ensure that resources are not scattered in multiple areas

India asked the Beijing-based multilateral lending agency Asian Infrastructure Investment Bank (AIIB) to level up investments in priority areas such as clean energy and infrastructure sector keeping a special focus on education and health, on 26 October.

The finance minister Nirmala Sitharaman said that India has embarked on the path of a self-reliant economy which led to a successful mitigation of the negative effects of the pandemic. She said this while addressing the annual meeting of the board of governors of Asian Infrastructure Investment Bank (AIIB).

Sitharaman asked AIIB to level-up its investments in key priority areas which includes clean energy and energy infrastructure. Also, it needs to keep a special focus on education and health and digital infrastructure in order to achieve a sound impact and ensure that resources are not scattered in multiple areas.

Her address included an advice to bank to not just play a catalytic role in mobilising diverse private sector resources but also discover concrete mechanisms to enhance its own resources, as mere public resources are not sufficient enough to meet the vast infrastructure needs of the members.

The mechanism must include early action on the recommendations of G20’s Expert Panel’s Report on the multilateral development bank’s Capital Adequacy Framework (CAF),  se added.

The well-targeted policy mix with the support of major structural reforms and a sound external balance sheet have contributed to its growth in spite of exogenous threats, said the finance minister referring to the Indian economy.

The Indian economy has shown a consistent resiliency achieving remarkable progress via digitalisation mission by using technology to facilitate social protection and boost financial inclusion, said Sitharaman at the 7th annual meeting of AIIB.

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Finance Ministry Seeks Industry Suggestions On Tax Regime for FY24 Union Budget

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The finance ministry may make industry’s demands (backed by justifications) a part of the budget, if it finds a merit in them, said the ministry. The Union Budget for the next fiscal year which will start from April 2023, will probably be presented in the parliament on 1 February 202. The government is working hard to introduce tax incentives, deductions and exemptions meanwhile rationalising the direct tax rates on the other hand

The finance ministry of India kickstarted the stakeholder consultation for the federal budget for the upcoming fiscal year.  It has asked out the industry and trade associations for suggestions about the nation’s direct and indirect taxes.

The finance ministry may make industry’s demands (backed by justifications) a part of the budget, if it finds a merit in them, said the ministry.

The suggestions for tweaks in the duty structure, rates and broadening of tax base on both direct and indirect taxes is required to be submitted by the industry stakeholders by 5 November. The Union Budget for the next fiscal year which will start from April 2023, will probably be presented in the parliament on 1 February 2023. 

The ministry said that the industry must note ‘positive externalities’ coming out of the suggestions. The government is working hard to introduce tax incentives, deductions and exemptions meanwhile rationalising the direct tax rates on the other hand.

In case of indirect taxes, the request against correction of inverted duty structure for any commodity must be supported by value addition at each stage of manufacturing. The minister has also asked industry stakeholders to submit suggestions on easing compliance burden, providing tax certainty and reducing litigation.

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India Taking Actions Against Data Privacy Intrusion And Spamming: FM Sitharaman

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The minister said that the government will bring the new data protection bill soon and it has already withdrawn the old one. According to her, even in the newer data or digital based kind of services, there exists conscious attempt to ensure that the data owner’s consent is used. And it is used specifically for the purpose for which the consent is given

Finance Minister Nirmala Sitharaman said that the Indian government is proactively taking action against activities such as spamming and intrusion into data privacy, specifically in the banking sector. She was addressing a group of Indian reporters at a news conference in Washington on 15 October.

The minister said that the government will bring the new data protection bill soon and it has already withdrawn the old one. At the same time, action against spamming and unsolicited calls and messages is being taken. Intensive steps are taken by the government to prevent such kinds of activities which are not right. 

“Such issues keep coming like mushrooms. However, the government has grip on this matter and efforts are taken,” said the finance minister responding to a question. 

Sitharaman said that even in the newer data or digital based kind of services, there exists conscious attempt to ensure that the data owner’s consent is used. And it is used specifically for the purpose for which the consent is given. The digital based services are being outstretched to people like the account aggregator. 

In one of her statements, referring to numerous Chinese citizens, she said that the arrest alerts of some people misusing such data apps for lending money must have reached your ears, particularly in Andhra and Telangana. A lot of nationals from one country who misused the data, have been arrested.

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India Performs Well In A World Of Uncertainties: FM Sitharaman

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The GDP growth of 13.5 per cent in Q1 lead India cross the pre-pandemic level by 3.8 per cent. Since April 2022, India completely withdrew from lockdowns. The central government is working on a consolidation path and has budgeted to bring down the GFD-GDP ratio to 6.4 per cent from 6.7 per cent in 2021-22 and 9.2 per cent in 2020-21

Union Finance Minister Nirmala Sitharaman said that in a world of uncertainties, India is among the few standout performers, on 14 October. She said this a day after the International Monetary Fund (IMF) quoted India as a bright spot, despite facing an imminent recession in a global economy. 

“In a world of uncertainties, India is one of the very few standout performers,” the minister said, while addressing the International Monetary Finance Committee during the ongoing annual meeting of the World Bank and the IMF. 

Sitharaman quoted that according to India’s National Statistical Organisation (NSO), the GDP growth of India for Q1FY22-23 stands at 13.5 per cent on a year-on-year basis. This came out as the highest among the large economies. 

She said that even though India started the monetary normalisation process quite early, we could achieve this. The interest rate hiked from May and the surplus liquidity currently is being absorbed with the Standing Deposit Facility which was instituted in April 2022.

The central government is working to consolidate and has budgeted to bring down the GFD-GDP ratio to 6.4 per cent from 6.7 per cent in 2021-22 and 9.2 per cent in 2020-21, the minister noted.

Further, to empower the foundations for medium-term growth, the government expenditure is now moving towards capital instead of revenue, she added. 

According to Sitharaman, the GDP growth of 13.5 per cent in Q1 lead India cross the pre-pandemic level by 3.8 per cent. Since April 2022, India completely withdrew from lockdowns. 

Talking on investment, the minister said, gross fixed capital formation (GFCF) growth went up to 20 per cent in Q1. This was driven majorly by governments and public sector undertakings (PSUs) in the transport sector. Housing, construction, steel, pharma and IT in the private sector also contributed in the same

Proximate indicators such as cement, steel, IIP capital goods, non-gold and non-oil imports, and capacity utilisation, have also reflected certain growth.

“Double digits are growth can be witnessed both in exports and imports however, as compared to exports, import growth is more robust. It reflects the comeback of the domestic economy and the divergent slowdown in the global economy,” Sitharaman said.

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FM Sitharaman Urges For Effective Tax Reporting Regime On Crypto Assets

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Highlighting the need to boost the private sector participation, on increasing the sustainable and digital infrastructure investments, she also emphasised on mobilising finance at sub-national level for inclusive and quality infrastructure

Finance Minister Nirmala Sitharaman urged for an effective tax reporting regime and information exchange between jurisdictions on 13 October. This to combat offshore tax evasions for crypto assets.

On the side-lines of the annual meetings of the International Monetary Fund (IMF) and the World Bank, Sitharaman critically noted a number of critical issues, including infrastructure, investments and international taxation. She participated in the G20 Finance Ministers and Central Bank Governors meeting too.

Highlighting the need to boost the private sector participation, on increasing the sustainable and digital infrastructure investments, she also emphasised on mobilising finance at sub-national level for inclusive and quality infrastructure.

Discussions were held, on the progress made on international taxation agenda in this year, during last session of the ongoing G20 meeting.

Addressing on the two-pillar solution, Sitharaman urged for participative engagement of all jurisdictions in negotiations and prioritise capacity building. She further added that international tax rules must be simple and easy to understand, administrable and should generate meaningful revenue in the developing countries.

According to multiple tweets by the Ministry of Finance, the minister also urged for an effective tax reporting regime and information exchange between jurisdictions in order to combat offshore tax evasion for crypto assets.

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Govt Ready To Talk, Address Concerns And Prevent Start-Ups From Moving Abroad: Sitharaman

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The government’s policies have created a favourable environment which has resulted in having more than 100 unicorns in India today. Government will interact with the ones who look forward to move overseas, to help them stay in India

Union Finance Minister Nirmala Sitharaman said that the government is ready to talk with the start-ups and address their issues as much as it can, on 11 October. Government will interact with the ones who look forward to move overseas, to help them stay in India. 

Informing a think-tank, she said that Prime Minister Narendra Modi himself is involved in start-ups initiative. The government’s policies have created a favourable environment which has resulted in having more than 100 unicorns in India today. 

“The Prime Minister himself have been engaged by me with the start-ups to know what they want from India. And we kept addressing the concerns as much as possible. Now as a result of which, we saw new Unicorns reached 100 in number within a year,” Sitharaman said in response to a question. 

Sitharaman was asked about the successful Indian start-ups moving out of the India to which she replied, “I’ve heard this from others as well. Start-ups are moving abroad in countries like Singapore and UAE. Well, if they want to talk to the Government of India, they may. And after hearing it if it’s possible, we’ll certainly attend to them.”

“So, I would think continuous engagement with the startups is what is going to help them to remain and do better within India. But, there temptations to go outside, build a common ground and serve on those courses. Not all of them are possible but equally, we can try,” she further added. 

The finance minister talking about taking special efforts to encourage start-ups in the Northeast by the Indian government said, “I myself have had meetings with chief ministers of those regions about start-ups. Particularly IIT Guwahati, has a lot of interaction with industry and also has potential to address challenges with solutions for the start-ups to come up.” 

“I find this unique in the Northeast, very typical for the Northeast kind of solutions emanating from start-ups which are coming up in that area,” she added.

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FM Urges CCI To Fairly Address Cross-Border Merger Issues

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FM Nirmala Sitharaman while addressing at the virtual inauguration of the CCI office for the Western Region in Mumbai asked CCI to have proactive approach instead of waiting for people to reach them with complaints

Finance minister (FM) Nirmala Sitharaman urged the Competition Commission of India (CCI) to “fairly and squarely” address issues rising due to corporate mergers involving cross-border elements on 6 October.

Minister while addressing at the virtual inauguration of the CCI office for the Western Region in Mumbai also asked CCI to have proactive approach instead of waiting for people to reach them with complaints. 

“Aspiring be a digital economy, it is also very important for us to address the challenges that digitisation brings, we cannot ignore them,” said Sitharaman. 

“Considering the multi-national nature of activities, various companies are looking to have interlocking positions in global value chains. There are holding companies, new acquisitions taking place, there are mergers and such related events happening across the globe, ” she further added.

The finance minister’s delivers her thoughts at a time when a parliamentary panel is in the process of examining the new competition bill. The bill empowers CCI to regulate cross-border mergers and digital companies.  It was presented in the parliament during the Monsoon session.

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