The second pre-budget consultation for the Union Budget was chaired by Finance Minister Nirmala Sitharaman in New Delhi recently. Leading experts from the financial and capital markets sector were present to discuss various issues such as the NBFC sector, GST rules, and improving the capital market. Raman Aggarwal, co-chairman of FIDC, highlighted the need for direct government intervention in the funding of NBFCs, with suggestions for funds to be allocated to SIDBI or NABARD for refinancing. The NBFC sector has seen significant growth over the past decade, and there is a call for regulatory frameworks to be harmonized with banks.
Aggarwal also raised concerns about the lack of recovery tools like SARFAESI for NBFCs and issues regarding TDS deductions for loan borrowers. GST demands based on core lending also need more clarity, with a specific mention of service elements. Discussions also revolved around GIFT City to ensure that capital remains in the country. George Alexander, MD of Muthoot Finance, shared suggestions from mutual funds, including proposals to improve the capital market and funding for the retail sector.
A group of economists also met with the Finance Minister earlier in June to provide recommendations for the upcoming budget. Suggestions included boosting capital expenditure and reducing the fiscal deficit. Sitharaman is expected to present the Union Budget for 2024-25 in the third week of July, following an interim budget presented earlier this year. With six budgets already presented in a row, Sitharaman is set to create a record when she presents the full-fledged budget for the new term of the BJP-led National Democratic Alliance government.
Overall, the pre-budget consultations highlight key areas of focus for the upcoming Union Budget, including the need for government intervention in the funding of NBFCs, clarifications on GST rules, and suggestions for improving the capital market and funding for the retail sector. With experts and economists providing valuable inputs, the Finance Minister will have a comprehensive understanding of the various issues at hand as she prepares to present the budget in July. Stay tuned for more updates as the budget date approaches.
