New Delhi: India Inc on Thursday pitched for continuation of reforms while ensuring tax and policy stability in the upcoming budget to prop up the economy hit by the Covid-19 pandemic.
In virtual pre-budget consultation with Finance Minister Nirmala SitharamanIndustry chambers said the government measures would help solidify the nascent signs of recovery currently being seen in private investment.
CII President TV Narendran said infrastructure spending through increased capital expenditure by the government should continue to support growth in the meantime.
“The infrastructure sector with a multiplier effect on the rest of the economy, especially in the infrastructure sector, requires interventions to improve and diversify sources of financing. In this context, it is suggested that the government consider developing a municipal bond market. should be done so that urban local bodies can raise funds for investment in infrastructure,” he said.
Meanwhile, Assocham suggested extending the ‘Vivad Se Vishwas’ scheme to highly regulated sectors such as telecom, power and mining, along with a dispute resolution scheme for customs-related issues.
“We commend the government for the Vivad Se Vishwas scheme, which has gone a long way in reducing the long pending litigations and has resulted in greater success.
Many infrastructure and service sectors such as telecom, power, mining etc., which were privatized to promote investment and growth, are highly regulated/licensed,” said Vineet Agarwal, president, ASSOCHAM.
Therefore, there are many legacy court cases, which often arise out of interpretation of rules/policies, Agarwal said, adding that these cases go on for 10-15 years.
He said that till the time these matters are decided, considering the penal rates of interest, penalty and levy of interest on penalty, the outstanding amount could be 5x to 6x of the disputed principal amount, he added.
Ministers of State for Finance Pankaj Choudhary and Bhagwat Karad were also present in the meeting.
Finance Secretary TV Somanathan; Economic Affairs Secretary Ajay Seth, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey and Principal Economic Advisor Sanjeev Sanyal, besides other senior officials were also present in the meeting.
During the meeting, the PHD Chamber demanded extension of exemption in respect of Performance Bank Guarantee (PBG) and Earnest Money Deposit (EDM) by one more year.
During the pandemic, the government had reduced the percentage of performance security from 5-10 per cent to 3 per cent and eased the requirement of Earnest Money Deposit (EDM) by December 31, 2021.
This initiative has greatly supported the business and industry in the difficult times of COVID-19 as there was an acute financial crisis among many commercial entities, which in turn affected the timely execution of contracts and the bidding capacity of business entities, Ph. . Pradeep Multani, President of Chamber of Commerce and Industry.
Emphasizing on the importance of stepping up pandemic preparedness, which will help mitigate further risks to growth, Narendran said, “With the risk of the Omicron variant being large-scale, with adequate provisioning in the budget for COVID-19 Finding booster doses of vaccines is important. Strengthening our surveillance, testing, vaccine research, therapeutics and healthcare infrastructure.”
During a meeting with representatives of the financial sector and capital markets, the Finance Industry Development Council (FIDC) suggested bringing in some element of ‘flexibility’ in the case of retail loans given to individuals or small businesses.
Small loans (retail and MSMEs) up to Rs 2 crore may be allowed to be marked as Special Mention Account (SMA) and Non-Performing Assets (NPA) till the end of the month and for loans up to Rs 2 crore. The connection can be upgraded. FIDC director Raman Agarwal said that the standard category from NPAs may be allowed to continue.
FIDC stated that SIDBI is best suited as an institution to provide refinance facility to NBFCs for on-lending to MSMEs and other suitable sectors.
Representatives of mutual fund industry and banks were also present in the meeting.
The Finance Minister will meet with representatives from the services and trade sectors and experts from industry and infrastructure and climate change on Friday afternoon.
The Finance Ministry said that two consultations with different stakeholder groups will be held virtually.
A tweet from the Finance Ministry said, “FM Mrs @nsitharaman will hold consultations in the afternoon with representatives from the services and trade sector and with another group of experts from industry, infrastructure and climate change.”
In virtual pre-budget consultation with Finance Minister Nirmala SitharamanIndustry chambers said the government measures would help solidify the nascent signs of recovery currently being seen in private investment.
CII President TV Narendran said infrastructure spending through increased capital expenditure by the government should continue to support growth in the meantime.
“The infrastructure sector with a multiplier effect on the rest of the economy, especially in the infrastructure sector, requires interventions to improve and diversify sources of financing. In this context, it is suggested that the government consider developing a municipal bond market. should be done so that urban local bodies can raise funds for investment in infrastructure,” he said.
Meanwhile, Assocham suggested extending the ‘Vivad Se Vishwas’ scheme to highly regulated sectors such as telecom, power and mining, along with a dispute resolution scheme for customs-related issues.
“We commend the government for the Vivad Se Vishwas scheme, which has gone a long way in reducing the long pending litigations and has resulted in greater success.
Many infrastructure and service sectors such as telecom, power, mining etc., which were privatized to promote investment and growth, are highly regulated/licensed,” said Vineet Agarwal, president, ASSOCHAM.
Therefore, there are many legacy court cases, which often arise out of interpretation of rules/policies, Agarwal said, adding that these cases go on for 10-15 years.
He said that till the time these matters are decided, considering the penal rates of interest, penalty and levy of interest on penalty, the outstanding amount could be 5x to 6x of the disputed principal amount, he added.
Ministers of State for Finance Pankaj Choudhary and Bhagwat Karad were also present in the meeting.
Finance Secretary TV Somanathan; Economic Affairs Secretary Ajay Seth, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey and Principal Economic Advisor Sanjeev Sanyal, besides other senior officials were also present in the meeting.
During the meeting, the PHD Chamber demanded extension of exemption in respect of Performance Bank Guarantee (PBG) and Earnest Money Deposit (EDM) by one more year.
During the pandemic, the government had reduced the percentage of performance security from 5-10 per cent to 3 per cent and eased the requirement of Earnest Money Deposit (EDM) by December 31, 2021.
This initiative has greatly supported the business and industry in the difficult times of COVID-19 as there was an acute financial crisis among many commercial entities, which in turn affected the timely execution of contracts and the bidding capacity of business entities, Ph. . Pradeep Multani, President of Chamber of Commerce and Industry.
Emphasizing on the importance of stepping up pandemic preparedness, which will help mitigate further risks to growth, Narendran said, “With the risk of the Omicron variant being large-scale, with adequate provisioning in the budget for COVID-19 Finding booster doses of vaccines is important. Strengthening our surveillance, testing, vaccine research, therapeutics and healthcare infrastructure.”
During a meeting with representatives of the financial sector and capital markets, the Finance Industry Development Council (FIDC) suggested bringing in some element of ‘flexibility’ in the case of retail loans given to individuals or small businesses.
Small loans (retail and MSMEs) up to Rs 2 crore may be allowed to be marked as Special Mention Account (SMA) and Non-Performing Assets (NPA) till the end of the month and for loans up to Rs 2 crore. The connection can be upgraded. FIDC director Raman Agarwal said that the standard category from NPAs may be allowed to continue.
FIDC stated that SIDBI is best suited as an institution to provide refinance facility to NBFCs for on-lending to MSMEs and other suitable sectors.
Representatives of mutual fund industry and banks were also present in the meeting.
The Finance Minister will meet with representatives from the services and trade sectors and experts from industry and infrastructure and climate change on Friday afternoon.
The Finance Ministry said that two consultations with different stakeholder groups will be held virtually.
A tweet from the Finance Ministry said, “FM Mrs @nsitharaman will hold consultations in the afternoon with representatives from the services and trade sector and with another group of experts from industry, infrastructure and climate change.”
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