Tribune news service
New Delhi, December 30th
Union Treasury Secretary Nirmala Sitharaman chaired pre-budget consultations with state finance ministers on Thursday. A number of prime ministers and deputy prime ministers attended the meeting in addition to senior state and Center officials.
Union Finance Minister TV Somanathan welcomed attendees and briefed them on the importance of this special consultation meeting, an official press release said.
Most of the participants thanked the Union Treasury Secretary for providing financial support to their states / UTs during the worst months of the pandemic by increasing credit limits, granting states sequential loans, and special investment aid.
- Increased spending on research and development
- Infrastructure status for digital services
- Rationalization of income tax tables
- Investing in online security measures
- Incentives for hydrogen storage and fuel cell development
The participants also made numerous suggestions to the Union Finance Minister for inclusion in the budget speech. Proposals included increased spending on research and development (R&D), infrastructure status for digital services, streamlining the income tax regime, investing in online security measures, and incentivising hydrogen storage and fuel cell development.
With regard to income tax, some state finance ministers believed that the income tax blocks rose sharply from 5 percent to 20 percent and 30 percent. Multiple surcharges on some of the panels raise the income tax rate to over 40 percent.
Noting that the center has already lowered corporate tax rates to improve compliance and attract more industry, they felt that such an approach could be applied to income tax blocks as well.
GST compensation applied for for another 5 years
States ruled by the opposition have called for the GST compensation to be extended from two to five years. They have also requested a higher share from the Union government for centrally funded programs as the pandemic has affected their revenues. The GST remuneration ends in June next year.