New Delhi [India], January 25: The Federation of Indian Chambers of Commerce and Industry (FICCI) has put forth a comprehensive set of recommendations for the upcoming Interim Union Budget for 2024-25. These recommendations cover various aspects of the economy, including investments, support for micro, small, and medium-sized enterprises (MSMEs), innovation, taxation, and the start-up ecosystem.
FICCI emphasizes the need for sustained and intensified investments, highlighting the positive growth in capital formation and the investment-to-GDP ratio. The organization advocates for continued public capital expenditure, especially in physical, social, and digital infrastructure, citing the importance of India’s current position in the global scenario.
One of FICCI’s significant proposals is the creation of an ‘Indian Taxonomy’ for green finance. This standardized framework would enable the evaluation of sustainable versus non-sustainable activities, enhancing transparency in the financial sector and aligning institutions with national and global sustainability goals.
In light of recent global developments and the search for alternatives to China, FICCI recommends positioning India as the next global manufacturing hub. The organization suggests extending the Production Linked Incentive (PLI) schemes for manufacturing operations for at least five years. This move aims to attract substantial investments from global manufacturing companies, strengthening India’s competitive edge.
FICCI also emphasizes the importance of supporting research and development (R&D) to spur economic growth. The organization proposes refinements to the existing patent box regime, extending concessional tax rates, and introducing incentives for new R&D companies. Additionally, FICCI recommends extending the concessional tax rate of 15% to new R&D companies setting up significant facilities within the next five years.
To support the MSME sector, FICCI presents several recommendations. These include revising the qualifying criteria for mandatory registration on the Trade Receivables Discounting System (TReDS) platform, expanding the Account Aggregator framework for MSME lending, and changing the NPA classification norms for MSMEs.
FICCI also calls for simplifying compliance with respect to Tax Deducted at Source (TDS) by rationalizing the rate structure and introducing a negative list of payments exempt from TDS.
Regarding taxation, FICCI proposes exempting Buyback Distribution Tax (BBT) for listed shares under the ‘open market through stock exchange’ method to prevent double taxation in buy-back transactions.
Recognizing the role of start-ups in fostering innovation and economic growth, FICCI recommends treating listed and unlisted equities at par for computing long-term capital gains. The organization also advocates for extending tax deferral on Employee Stock Ownership Plan (ESOP) perquisites to all employees.
To enhance dispute resolution mechanisms, FICCI proposes the creation of an independent forum comprising retired judges, professionals, or experts. This forum would focus on resolving assessment or post-assessment level disputes in a fair and expedited manner.
FICCI’s comprehensive recommendations for the Interim Union Budget aim to fortify India’s economic foundation and position the country as a key player in the global arena. These proposals address various aspects of India’s economic landscape, ensuring resilience, innovation, and sustained growth.
As the country eagerly awaits the unveiling of the Interim Union Budget, FICCI’s forward-looking vision reflects the aspirations of a stronger and more prosperous India.
