Budget 2024 in sight, CII calls for increased capex, sees 8% GDP growth in FY25

Ahead of the release of Union Budget 2024 next month, the Confederation of Indian Industries (CII) has called for increased capital expenditure and pushed for reforms in key sectors like agriculture, land and labour.

The industry body sees the gross domestic production (GDP) to grow at 8% in fiscal year 2024-25 (FY25), which is starkly higher than the Reserve Bank of India (RBI) estimate of 7.2%.

"The growth estimate hinges critically on addressing the unfinished reform agenda on priority, in addition to improvement in world trade prospects aiding our exports, twin engines of investment and consumption doing well and expectations of a normal monsoon among other factors," CII President Sanjiv Puri said, while addressing the press in New Delhi on June 13.

"Very clearly, we are expecting all three sectors of the economy -- agriculture, services and industry -- to fire and do well next year," news agency PTI further quoted him as saying.

Increase capex by 25%

According to Puri, the record high dividend of Rs 2.11 lakh crore transferred by the RBI to the government must be used towards increasing the capex.

"The capex should be raised by approximately 25% in FY25 over the revised estimate of FY24," he said. This would be higher as compared to the 16.8% jump in capex projected in the interim budget.

Tax reforms

The CII president outlined a 14-point agenda for the government, which includes tax reforms to boost the country's investment climate.

The Centre should consider the simplification and of capital gains tax and rationalisation of TDS provisions, he added.

“As far as GST is concerned, what we are saying there can be three slabs and there are areas like petroleum real estate that are outside the ambit... be included in the GST,” Puri further said.

The industry veteran also batted for schemes such as employment-linked incentive (ELI) to boost production in high-labour intensive sectors, he added. The scheme could push growth in sectors such as toys, textiles, tourism, and logistics.