India's consumption-led economy needs an Increase in household disposable income to get people to spend, suggested India Inc to Finance Minister Arun Jaitley at a pre-budget consultation meeting on Tuesday.
The suggestion included an increase in investment limit under Section 80C of the income tax law, linking income tax exemption to inflation and removing surcharge.
Given India's penchant for hoarding gold, the Centre must introduce gold-backed savings and investment schemes in a bid to monetise the hoarded stock, said industry bodies FICCI, Assocham and CII.
Reintroduction of tax breaks for retail investment in infrastructure bonds was another point put forward.
The trade bodies called for public investment in infrastructure sector to increase significantly.
A government-led reverse build, operate and transfer (BOT) process with initial public funding for projects which would be then handed over to private operators was suggested by Confederation of Indian Industry (CII) President Ajay S Shriram.
With the state-owned organisations sitting on a cash pile of almost 2 lakh crore, the private sector is eyeing the funds being used for infrastructure projects.
Pointing to the strong balance sheets of the Navaratha companies, the government could utilise the funds better by providing a stimulus for the infrastructure industry, even as the balance sheets of private sectors continue to remain weak, said Assocham President and Yes Bank MD and CEO Rana Kapoor.
The industry body suggested a five-year systematic programme for disinvestment with the possibility of the government listing IRCTC, the online booking portal of Indian Railways.
Cost of Capital
Concerns over the 'cost of capital' were again raised by the private sector, urging a rate cut to help the industries handle their loan portfolios better.
A tax structure rationalisation is what FICCI President Jyotsna Suri urged the government to go for, reports BusinessLine.
The budget must clarify on how capital gains from indirect transfers are to be taxed, said CII.
With respect to indirect transfers, Accosham recommended withdrawal of retrospective amendment made by the Finance Act, 2012, adding that such a move would help improve investor confidence.