Govt Should Continue Simplification Of Tax Structure, Focus On Social Infra In Budget 2024-25: CII President

The CII added that it expects the success of the policies in the first two terms of PM Modi and the Indian economy’s performance in the period to provide a good base to help speed up the process

The official noted that in light of surging inflation levels, the authorities might need to simplify tax structure and the TDS system. ( Image Source :Unsplash )

The government could consider providing income tax relief for individuals in the lowest slab in the upcoming Budget for 2024-25, the newly elected President of CII, Sanjiv Puri, said. The official noted that in light of surging inflation levels, the authorities might need to simplify tax structure and the TDS system.

In a conversation with PTI, Puri recommended that the government should develop an institutional platform for consensus building between the Centre and States to help execute the reforms successfully, including the ones related to agriculture, power, land, and labour. 

The Confederation of Indian Industry further noted that it doesn’t expect the coalition politics in the new government to obstruct reforms. It added that it expects the success of the government policies in the first two terms of PM Modi in office and the Indian economy’s performance in the period to provide a good base to help speed up the process. 

Sharing the body’s expectations from the Budget ahead, Puri said, “Broadly, I would say at this point of time it is public capex, adherence to fiscal glidepath, roadmap for investment in the social infrastructure, green fund and greater investment in the rural sector. These are the broad principles.”

Notably, the wholesale inflation climbed to 2.61 per cent in May as prices of food articles, such as vegetables and manufactured goods increased. The wholesale price index (WPI)-based inflation stood at 1.26 per cent in the previous month. Comparatively, the figure stood at -3.61 per cent in May last year.

Commenting on inflation outlook, Puri noted, “Inflation is probably going to be around 4.5 per cent this year on the back of an expected good monsoon, which has in the past led to moderation of food inflation.”

Sharing suggestions about tax, the official said, “What we are suggesting is that the process of simplification should continue. There are certain suggestions relating to capital gains, which are different for different instruments. There are some operational difficulties in TDS (tax deducted at source) and multiplicity of rates and CII would prefer simplification of these. ...over a period of time as far as customs is concerned, we should move to a three-tier structure, primary at the lowest level, intermediates in between and then the finished goods and all over a period of time should be moderate rates with some exclusions, as deemed appropriate.”