July 3, 2019
Looking forward to a pragmatic, growth rejuvenating and jobs creating Union budget 2019-20: PHD Chamber
While expressing enthusiasm on the forthcoming Union Budget on 5th July 2019, the industry body PHD Chamber of Commerce and Industry said, in a press statement issued here today, that budget for the year 2019-20 should step up measures to rejuvenating the economic growth trajectory with a special focus on job creating sectors such as housing and construction, tourism, food processing and textiles.
Mr Rajeev Talwar, President, PHDCCI, said that the roadmap to achieve economic size of US$5 trillion should focus on 9-10% economic growth with a whopping manufacturing growth rate of 11-12% and size of exports at the level of US$ 1 trillion annually.
At this juncture, bold and flexible labour reforms would be crucial to create employment opportunities for millions of growing young workforce, said Mr Rajeev Talwar.
Simplifying the labour laws by converting 44 Labour Laws into 4 Labour Codes, enacting law for fixed term employment in all sectors and reforming the Companies Act for simplification of compliances must be focused in the Budget, added Mr Talwar.
Corporate tax needs to be reduced to a level of 25% for corporate tax payers ignoring any turnover criteria, said Mr Rajeev Talwar.
Consumption led growth needs to be strengthened with large scale reforms in the direct taxation such as exemption limit for all tax payers should be not less than Rs 5 lakhs, he added.
The maximum personal income tax rate should move towards 25% to increase the personal disposable income, which will boost demand in the economy, he said
Lucrative incentives should come to enhance the intensity to save more as gross savings rate to GDP has been decelerating significantly during the last few years, said Mr Rajeev Talwar.
A significant boost is required to push infrastructure development to the next level. Higher infrastructure outlays with the roadmap to clear the pending infrastructure projects and announcement of large new projects would boost the sentiments of the private investors from domestic and global markets, said Mr Rajeev Talwar.
Government at this juncture must provide a roadmap for Rs. 100 lakh crore investments in infrastructure sector in the next five years, said Mr. Rajeev Talwar
There is a need to undertake a programme of elevated National Highways to boost investments in assets, employment and industries rather than opt for the acquisition of land, he said.
The Real Estate Sector should get an industry status to have enhanced credit availability for big-ticket housing projects, said Mr Rajeev Talwar.
There is a need to index all the measures taken by the Vajpayee Government for promotion of Housing, Real Estate and Construction to boost demand and create jobs, he said.
At this juncture, the cost of capital needs to be rationalised significantly as banking margins in the financial sector have been the highest in the world (over 500 basis points), said Mr Rajeev Talwar.
The transmission of the policy rate cut by the banking sector in terms of reduced lending rates would be crucial to boost liquidity and induce demand in the country, said Mr Rajeev Talwar.
Special support must be extended to the MSMEs as they have the potential to create millions of job opportunities. The loan of Rs. 1 crore must be extended by banks without any collateral and at reduced rate of interest to the MSMEs, said Mr Rajeev Talwar.
To boost exports, support should be extended to exporters by providing export credit at LIBOR + 1% using US$100 billion of forex reserves as a revolving fund, said Mr Talwar.
The exports logistics infrastructure must be improved and bottlenecks at ports must be removed to reduce transaction costs and improve ease of doing business for industry.
Keeping in view the current uncertain global economic environment, set off in respect of foreign taxes paid on overseas income especially in case of loss/inadequate profits should be permitted to carry forward such unutilized credit for adjustment in future years, he said.
Large scale spending is desired in the rural areas to rejuvenate rural demand. Lower interest rates for credit to the farmers would address farm distress to a certain level, he said.
Reforms in the agriculture sector must continue to address farm distress with measures to enhance growth and productivity to double farmers income by 2022, said Mr. Rajeev Talwar
Wastages must be reduced from the current level of more than 30% to less than 10% by augmenting storage capacities, modernizing/ upgrading godowns. This would enhance the income of farmers, added Mr Talwar.
Subsidies on electricity, fertilisers, etc. should be provided by the way of direct transfer to reduce wastages in the transfer of subsidies, said Mr. Rajeev Talwar
Further, one (1) lakh check-dams must be created to facilitate irrigation systems in the agriculture sector as check-dams are found to be very beneficial in areas where there is poor rainfall and lack of perennial sources of water, said Mr Talwar.
At the social front, the spending on public healthcare must be increased to at least 3% of GDP with increase in annual budget each year in order to achieve the target by FY2024. The Education expenditure as a percentage of GDP needs to be increased to the level of 6% of GDP.
The GST on Tourism facilities must be charged at fresh rates of 5% for accommodation upto Rs. 15,000/- and 12% above Rs. 15,000/- to bring in investments and create jobs in Hotels, Restaurants, Airlines, Railways, Road Transport as well as Travel Agents, said Mr Rajeev Talwar.
All petroleum products should be brought under the ambit of GST regime to remove the cascading of taxes such as excise duty, central sales tax including value added tax and increased cost to companies which use such products as inputs for manufacturing of products, added Mr Talwar.
There is a need to bring stamp duty and registration charges in the ambit of GST to simplify the home buying process, added Mr Talwar.
The Government has fostered a dynamic economic environment in the last five years with implementation of various praiseworthy economic reforms; and India has increased its presence significantly in the world economic system, said Mr Rajeev Talwar, President, PHD Chamber of Commerce and Industry in a press statement issued here today.
PHD Chamber envisages a New India where the economy will be in double digit growth trajectory, the manufacturing sector will be globally competitive, the agriculture sector will be sufficient to sustain the rising population and millions of jobs will be created for socio-economic development of the nation, opined Mr. Rajeev Talwar
Income levels of the people will be growing exponentially, farmers’ income will be doubled, taxation system will be simple and ease of doing business will become a reality in the New India envisaged by the Prime Minister, he said.
Koteshwar Prasad Dobhal