Suggestions to the Finance Minister

January 13, 2016 Hot from the Oven Valli Sarvani No comments

Union Finance Minister Arun Jaitley has received a lot of suggestions on Tuesday at a pre-Budget Consultative Meeting with the representatives of Banks and Financial Institutions (FIs). These suggestions include increasing exemption limit to Rs.2.5 lakhs for savings under the Income Tax Act, interest rates on small savings schemes to be fixed at five-year Government Security yields and an end to the dividend distribution tax.

Furthermore, many experts made demands that Corporate Social Responsibility (CSR) expenses should be treated as business expenditure for taxation purposes. Other suggestions that the finance minister received include issuing off shore INR bonds by banks for the sake of raising funds for infrastructure requirements. According to an official statement, the regulatory treatment of these bonds is being demanded to be equal with domestic infra bonds guidelines.

Other suggestions include broad based FDI in agriculture sector, having a new crop insurance scheme with support of technology and having fully integrated financial inclusion along with biometric authentication initiatives of the Government.

According to many financial experts, this new crop insurance scheme should be redesigned to ensure that compensation not only covers cost of cultivation but also some part of the farmer’s prospective income.

In order to further make this process better for farmers, the digitization of land records has been sought. Experts say that this helps in compensating farmers quickly. Along with that, direct distribution of fertilizer subsidies through Direct Benefit Transfers and savings has also been sought.

According to many experts, G-secs and small savings schemes rates could be aligned on a quarterly basis. They say that doing so prevents small savings rate becoming a problem in the monetary transmission process.

It was also suggested that until the private sector investment in the economy picks up, the Government should focus on increasing growth and public spending.

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