India Inc wants the government to continue with its reforms and ensure tax and policy stability in the 2022 Budget. Industry chambers, in the virtual pre-budget consultation with Finance Minister Nirmala Sitharaman, said government measures will help firmly entrench the nascent signs of recovery, which is currently seen in private investment.
TV Narendran, CII president, said capital expenditure by the government through enhanced infrastructure spending should continue to support growth. “Infrastructure sector with a multiplier impact on rest of the economy requires interventions especially to improve and diversify sources of financing.” He said the government should consider developing the municipal bond market so that urban local bodies can raise funds for investing in infrastructure.
The association chambers recommended extending ‘Vivad Se Vishwas’ scheme for highly regulated sectors like telecom, power and mining. Vineet Agarwal, Assocham president, said they appreciate the government for the Vivad Se Vishwas scheme which has gone a long way in reducing the long pending litigations and resulted in greater success. “Several infrastructure and service sectors such as telecom, power, mining etc, which were privatized to drive investment and growth are highly regulated,” he said. “There are many legacy court cases, often arising from interpretation of regulations and policies.”
Agarwal highlighted that such cases drag for years, up to 15 – years. “Given the condition of imposition of penal rates of interest, penalties, and interest on penalties, by the time these cases are decided, the due amounts may become 5x to 6x of the disputed principal amount.”
Representatives of the financial sector and capital markets, the Finance Industry Development Council (FIDC) suggested to bring some element of flexibility in case of retail loans given to individuals or small businesses. Raman Aggarwal, FIDC director, said smaller loans up to Rs 2 crore may be permitted to be marked as Special Mention Account (SMA) and Non-Performing Assets (NPAs) as on month-end and upgradation in respect of loans up to Rs 2 crore from NPA to standard category may be allowed to continue. The FIDC said SIDBI is most suited as an institution to provide a refinance facility to NBFCs for onward lending to MSMEs and other appropriate sectors.