Kicking off the Budget consultations with agriculture experts and India Inc, as she prepares for her maiden Budget to be presented on July 5, Finance and Corporate Affairs Minister Nirmala Sitharaman, said that concerns of the farm sector are high on priority list of the government.
Experts from the farm sector suggested measures to improve the food processing sector and introduction of technology-intensive processes in the non-farm sector and treating solar energy as third crop to augment income of farmers.
Incentivising and popularising usage of organic manure for improving carbon content in soil, resolving GST issues related to Farmers Producers Organisations (FPO), incentive for agro processing units in the border districts and enhancing investments in R&D in the agriculture sector were also part of the suggestions.
Other suggestions included filling up of vacancies in agricultural universities, increasing investment in micro irrigation and solar pumps, financial incentives to the States for implementing agricultural market reforms, promotion of handlooms and handicrafts in the North-Eastern States for employment generation and enhancing rural income, creating of aggregators for farm equipment and promotion of non-IT related rural start-ups. Few suggestions for the dairy sector were also submitted related to tax and duty structure and improving Prime Minister Krishi Sinchai Yojna (PMKSY).
India Inc put forward suggestions concerning industrial sector, land reforms, special economic zones, industrial policy, investment in research and development, simplification of tax regimes, tapping potential in tourism sector. It also made suggestions on Foreign Direct Investment (FDI), Good & Services Tax (GST), Capital Gains Tax, Corporate Tax, MSME sector, e-commerce, skill development, education and healthcare sectors, start-ups, media and entertainment sector and food manufacturing industry.
In its submission, the CII called for a simplified taxation regime besides other ideas for promoting growth and investment. “For this to fructify, a timeline for a taxation regime (Direct Tax) needs to be announced where the highest rate should be 18 per cent in addition to removing all exemptions and not doing grandfathering,” Vikram S Kirloskar, President, CII, said. A three-year roadmap for reducing the Income-Tax Act document to 4-5 pages was also sought.
Further, in order to bring down the high tax rates on capital which is a major deterrent for flow of capital, the CII President suggested bringing down the Dividend Distribution Tax to 10 per cent, from 20 per cent. It should also not be taxed at the hands of the investor.