With the Budget for 2022-23 nearing, finance minister Nirmala Sitharaman will meet stakeholders including representatives from industry, agriculture, health, education and economists after the conclusion of the Winter Session of Parliament on December 23 or even before if the session concludes ahead of schedule, sources told FE.
The budget for next fiscal year is to be presented on February 1, in the backdrop of a nascent recovery of the economy, robustness in tax receipts and the continuing need for government support via spending to aid the revival process.
While the Centre’s fiscal deficit for FY22 is budgeted at 6.8% of GDP, a level much above the FRBM threshold, many analysts expect the actual deficit to remain within the target even with a clutch of additional expenditure commitments that have come up due to enhanced fertiliser subsidy bill, bolstering of free ration scheme and the tax neutralisation scheme for exports.
The Centre’s fiscal deficit which widened to a very high level of 9.2% of GDP in FY21 due to Covid-related additional spending and revenue crunch. The announced plan is to reduce the deficit to below 4.5% of GDP by FY26. The Budget play give clarity on how and when the FRBM-mandated level of 3% fiscal deficit will be achieved.
Keeping the time constraints in mind, revenue secretary Tarun Bajaj has already met industry chambers such as Ficci and PHDCCI, which have submitted their suggestions for the budget. Bajaj will meet CII representatives on Friday.
Early submission of industry demands would help truncate the meeting time of Sitharaman with industry chambers, the sources said.
Finance and expenditure secretary TV Somanathan has concluded pre-budget meetings with various government departments on November 12 to take inputs for finalising their revised estimate for 2021-22 and budget estimate for 2022-23.
In the meetings, the totality of the requirements of funds was discussed for various programmes and schemes, along with receipts of the departments (such as interest receipts, dividends, loan repayments, departmental receipts, receipts of departmental commercial undertakings).
In its pre-budget meeting on November 29, Ficci suggestions include extension of cut-off date by two years for commencing manufacturing to avail concessional tax rate of 15% and reintroduce tax free infrastructure bonds. To widen the tax base and tax to GDP ratio, PHDCCI on Wednesday suggested capping the personal income tax rates at 15% with no exemptions.