CII President Calls for Income Tax Relief Amid Rising Inflation

CII President Sanjiv Puri suggests income tax relief for the lowest slab in the upcoming 2024-25 Budget, citing high inflation. He advocates for a consensus platform between the Centre and states for reform execution. Puri expects moderation in food prices due to a good monsoon and hopes for a reduction in interest rates by October.

CII President Sanjiv Puri has called for income tax relief for individuals in the lowest slab as part of the upcoming 2024-25 Budget, in light of rising inflation. In an interview with PTI, Puri emphasized the need for a platform to build consensus between the Centre and states for successful implementation of various reforms, including those related to land, labour, power, and agriculture.

Despite the coalition politics, the industry body remains optimistic about Prime Minister Narendra Modi's third term, citing the strong economic performance and effective policies of the previous terms as a foundation for accelerating reforms. ''Broadly, I would say at this point of time it is public capex, adherence to fiscal glidepath, roadmap for investment in social infrastructure, green fund, and greater investment in the rural sector. These are the broad principles,'' Puri noted when asked about CII's expectations from the upcoming Budget.

The wholesale inflation rate rose for the third consecutive month in May, reaching 2.61% due to increased prices of food articles and manufactured goods. The wholesale price index-based inflation was 1.26% in the previous month. Earlier, RBI Governor Shaktikanta Das indicated that the Reserve Bank of India may consider further policy actions if confident that headline inflation stays at 4%.

According to CII's estimates, inflation is expected to be around 4.5% this year, driven by a good monsoon. On the taxation front, Puri advocates for continued simplification and rationalisation of capital gains tax and highlights operational issues with TDS, calling for simplification. The CII president remains optimistic about the strengthening of the reform process and anticipates a possible reduction in interest rates in the second half of the financial year.

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