New Delhi: ‘Policies are needed to encourage the recent economic recovery process’, was the underlying message which was conveyed to Finance Minister Nirmala Sitharaman by a slew of economists who interacted with her as part of pre-budget consultations on Monday.
Sources aware of the development said that the Finance Minister was suggested to tone down tax mobilisation, which is quite high currently.
Though beneficial in the short run, it may hamper economic growth prospects in the long run, and therefore, there is a need to look at the tax structure, the economists are learnt to have informed her during the meeting.
A suggestion was made to provide a stimulus on taxation, sources added.
A section of economists also suggested doing away with the customs notification on import duties, which they said was not good for an emerging economy like India.
On one hand, the focus is on propelling economic growth, while at the same time, import duties are imposed on various commodities, which will affect supplies, so it was suggested that the government should do away with import duty notification, a source aware of the developments said.
India has imposed import duty on various commodities like palm oil, chickpeas and Bengal gram to list a few.
Another suggestion was made to reinstate the revenue deficit target in the FRBM Act, which was done away with in 2018.
Sitharaman has held pre-budget consultations with a varied group of stakeholders like states’ finance ministers, farm bodies, social sector organisations, financial institutions, business chambers and trade bodies among others. The exercise is part of the budgetary exercise.
The Union Budget for 2023-24 is likely to be presented by the finance minister on February 1, 2023.