The Confederation of Indian Industry president Sanjiv Bajaj on Wednesday asked the Central government to contemplate reducing the personal income tax rates to spur economic activities. The business tycoon also said the country’s underlying growth drivers are strong and the economy would grow in the range of 7.4 per cent to 8.2 per cent in the next fiscal.
“Putting more money in the pockets of the consumers is of vital importance to revive consumption demand in the economy. The government should contemplate a reduction in the rates of personal income tax in its next push for reform as this would increase disposable incomes and revive the demand cycle,” Bajaj, who is chief managing director of Bajaj Finserv, said in a press conference.
He was speaking to reporters as part of the CII’s theme 2022-23 “Beyond India @75: Growth competitiveness, sustainability and internationalisation”.
The CII is also organising ‘Sankalp Se Siddhi’ in the city, in which Union Home Minister Amit Shah will attend on Thursday.
“The Central and state capex are rising and tax buoyancy would support growth in FY23. Hence, on balance, CII has retained India’s GDP forecast in a range of 7.4 to 8.2 per cent in FY23,” Bajaj said.
He also said the CII believes that there is a lot that industry and CII could do themselves in taking India to a USD 40 trillion goal post by 2047.
Bajaj also maintained that India needs to boost its forex reserves to revive the economy especially in view of the capital outflows by foreign institutional investors, prompted by an uncertain global economic environment.
“The government should work towards inclusion of some of the large market cap companies into the global equity indices like MSCI and FTSE indices, expedite India’s entry into J P Morgan’s Global
Emerging-Market Bond Index and Barclays Global Bond Index, and consider bringing out a special issue of India Millennial Bonds like was done in 2008,” he opined.
Replying to a query, he said the demonetisation gave a major push to the digital payment, which helped tide over the COVID-19 pandemic induced lockdown and its cascading effect on the economy.
According to him, the digital payment in India today is more than the digital payment in the United States of America and China put together.
With reference to the big boost to the digital payment in India, Bajaj said, “If we can innovate for ourselves, we can do it for the world as well.”
The CII president also predicted that by 2027, some initiatives will make India a USD five trillion economy.
Bajaj underscored the importance of expanding the Production Linked Incentive Scheme (PLIS) and bringing more sectors within its ambit, especially those which are labour intensive and also in sectors where our imports are high.
The CII will continue to scale up its engagement in skilling and will skill 1.5 lakh youth and help place another two lakhs youth, improve manufacturing competitiveness by proposing to build a Cost of Doing Business (CoDB) Index, and work with the states to strengthen the national single window system, he said.