Focus on non-tax options for revenues: CII tells Govt

Sai Nikesh | The Dollar Business The Confederation of Indian Industry (CII) on Monday, while expressing hope that the government would focus on narrowing fiscal deficit in the upcoming budget for 2015-16, suggested the government to explore on implementing non-tax policies for achieving better revenues. Despite the revenue collections through huge taxes, the CII suggested that the government shall focus on non-tax options like increased disinvestments, effecting dilution of residual government shares in private companies as well as going ahead with sale of spectrum and mineral blocks, to garner revenues. The Confederation also suggested the strategic sale of loss-making Public Sector Units to raise revenues. The CII Director General Chandrajit Banerjee was quoted to have said the sources that the controlled deficit would keep inflationary tendencies under check and facilitate 'crowding in' of private investment, thereby strengthening the recovery process. The top CII official further suggested that the government should start process of monetizing the unutilized lands with the railways, port trusts, among others, to raise revenues for the improvement of infrastructure in the country. He further said that that the government reducing subsidy burden down to 1.5% of total GDP from the existing 2.3% of GDP could save the capital expenditure for future. The CII also said that by reducing its share in the Public Sector Banks (PSB) to 51% or even below that, the government will be able to facilitate the capital infusion in the PSBs, which would bring funds and boost the efficiency of the PSBs. Meanwhile the survey report by the Associated Chamber of Commerce (Assocham) states that majority of the salaried employees want the government to increase tax exemptions in the budget. Any hike in exemption would leave more money in the hands of the employees and will boost their purchase power, the ASSOCHAM said. The report also says that there is also a concern over the housing loans, where the 78% of the surveyed people want want interest exemption on home loans to go up to Rs 5 lakh from Rs 2 lakh. The report further revealed that 88% of respondents in the survey wanted the government to reduce the record-high duty on gold import. Besides the moves related to tax facilitations, the government is also expected to come up with the initiatives that would boost corporate investments and promote manufacturing as part of the Make in India campaign and also pitch for increased public spending as a process to foster economy towards a higher growth path.  

This article was published on February 23, 2015.