In pre-Budget consultations held on Thursday, industry leaders proposed several ideas to Finance Minister Nirmala Sitharaman, including income tax relief for the middle class to boost consumption, a reevaluation of the 45-day payment deadline for micro and small enterprises, restructuring GST rates, and measures to promote exports and simplify IT imports.
Additionally, Ms. Sitharaman engaged with representatives from the financial sector, including venture capital (VC) providers, who advocated for permitting the country’s pension and insurance funds to invest in alternate assets. They also requested expanding the angel tax exemption list to include registered foreign VC investors. The Indian Venture and Alternative Capital Association urged a review of the Competition Commission of India’s definition of ‘control,’ which currently includes private equity investors with minority stakes.
Assocham suggested raising the basic income tax exemption limit from ₹3 lakh to ₹5 lakh and doubling the standard deduction to ₹1 lakh to account for inflation. They argued that these tax concessions would boost consumption without adversely impacting the government’s fiscal position.
While many industry leaders emphasized support for micro, small, and medium enterprises (MSMEs), the Bengal Chamber of Commerce (BCC) highlighted issues with the Income Tax Act’s mandate for SME payments within 45 days, noting that the industry standard is a 60-90 day credit period. BCC proposed aligning the IT law with the Central GST Act, which disallows payments beyond 180 days, and extending its scope to medium-sized firms.
BCC also expressed concerns about the significant challenges involved in importing laptops, which now require five approvals in addition to an import license. They argued that until India achieves self-sufficiency in electronics, reliance on imports is necessary, and non-tariff barriers could create scarcity and drive up prices. The chamber called for a reconsideration of these import restrictions.
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