Highlights of Nirmala Sitharaman’s Meeting With India Inc: Will India Go For Income Tax Rate Cuts?

The Budget 2025 is set to be announced in the upcoming February. In this pre-budget time, industry bodies are requesting tax cuts, increased public spending, and more focus on MSMEs to influence demand and job creation in the country.

Industry bodies highlighted the overall demand for income tax cuts on Monday, 30th December 2024. During the pre-budget consultations, Sanjiv Puri (President of CII) said that the marginal rate of income tax of up to Rs 20 lakh must be reduced to influence demand. Sanjiv Puri also suggested FM Nirmala Sitharaman cut off the excise duty on fuel to control inflation in India. 

In the meeting of India Inc. and FM Nirmala Sitharaman, the industry body demanded reduced tax rates/excise duty, improved credit flow for small ventures, and develop rural industrial parks with female workforce participation. 

Key Highlights of Pre-Budget Meeting

• Demand for marginal income tax rate cuts for up to Rs 20 lakh is highlighted by Sanjiv Puri (CII President).
• 25% increase in government capex was suggested to FM Nirmala Sitharaman. 
• Steps proposed to improve credit flow to MSMEs and increase female workforce participation.
• The request was raised to develop rural industrial parks, especially near the industrial hubs. 
• Specific measures were proposed for defence and PCB. 

What Sanjiv Puri Said?

Post this Pre-Budget consultation with FM Nirmala Sitharaman, Sanjiv Puri (CII President) told the media that the Indian economy is doing great work but there are a lot of challenges at the global level. He said, “We are seeing dumping of a lot of products (by China) into various parts of the world, including India. We also have the issue of climate emergency, which, besides other things, also impacts food and nutrition, (Food) security and inflation. In this context, we have made several suggestions and ideas”. 

Puri also acclaimed that the reduction of excise duty on petroleum will offer people with higher disposable income and may also contribute to a virtuous cycle in the hands of customers. 

Future Outlook

It is hard to make a specific claim about what the government will bring regarding tax relief. However, we can consider the claims of industrial professionals to have an idea about it. 

Vijay Sankar (Vice President of FICCI) said, “FM Nirmala Sitharaman and her colleagues gave a very patient hearing to the industry. There were around 13 members from different industry chambers. There was some commonality of themes across some of the representations of the temporary slowdown faced due to dumping products, especially by some of our neighbours like China due to the slowdown in their economy”.