Pre-Budget Talks With PM Modi: Economists Advocate Income Tax Cuts And Enhanced Export Strategies—Here’s All About It

In a high-level pre-budget consultation, Prime Minister Narendra Modi engaged with prominent economists to chart India's economic roadmap for Budget 2025. The discussions centered on reducing income tax rates, rationalizing customs tariffs, and implementing targeted measures to support exports.

Economists highlighted the importance of targeted interventions in skilling, boosting agricultural productivity, and sustaining the capital expenditure (capex) momentum. 

Prime Minister Modi reiterated employment generation as a cornerstone of government policy, emphasizing the need for enhanced data quality to achieve better policy outcomes. “He heard everyone very patiently,” remarked an economist present at the meeting.

The Prime Minister underlined the vision of 'Viksit Bharat' (Developed India), urging a transformative mindset to position India as a developed nation by 2047. 

The meeting, themed "Maintaining India's Growth Momentum at a Time of Global Uncertainty," also explored strategies to address global economic challenges and geopolitical tensions.

Industry Proposals for Budget 2025

Industry leaders, represented by bodies such as CII (Confederation of Indian Industry), FICCI (Federation of Indian Chambers of Commerce & Industry), and PHDCCI (PHD Chamber of Commerce and Industry), presented key recommendations:

Tax Reforms and Simplification:

1. Rationalisation of capital gains tax.

2. Simplified compliance procedures and reduction of TDS provisions.

3. Dedicated dispute resolution mechanisms.

GST 2.0: CII proposed a three-rate GST structure and expanding the input tax credit system.

Direct Tax Reliefs: PHDCCI sought lower tax rates for LLPs, elimination of the dividend distribution tax, and revisions in share buyback taxation.

Customs and Indirect Taxes: Simplified appeal processes and zero customs duty for critical raw materials.

The meeting saw inputs from eminent economists, including agricultural expert Ashok Gulati, former IMF executive director Surjit Bhalla, and D K Joshi of Crisil. The dialogue set the stage for policy formulation aimed at navigating economic uncertainties and fostering sustainable growth.

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