Budget 2023: PHDCCI calls for more tax rebate benefits for consumption expenditure

For the upcoming Union Budget 2023–24, the industry group PHD Chamber of Commerce and Industry (PHDCCI) PHDCCI called for an increase in the tax rebate advantages for consumer spending, a decrease in the cost of doing business, and the hassle-free disbursement of loans at reasonable rates for firms.

"At this juncture, to enhance the consumption in the economy, there is a need to increase the tax rebate benefits for consumption expenditure," the chamber suggested.

It was emphasised that the tax credit for buying a self-occupied home, which is presently worth Rs 2 lakh, needs to be increased to Rs 5 lakh in order to account for a wider range of consumption expenditures, such as buying more than one home, buying a car, and buying other durables.

"Consumption expenditure rebate must be enhanced to Rs 5 lacs per annum. This will not only enhance the aggregate demand in the economy but also attract private investments, increase capacity utilization of firms and create enormous employment opportunities in the economy," PHD Chamber of Commerce and Industry stated.

The chamber also recommended that the government concentrate on lowering the cost of doing business, including the expenses of capital, power, logistics, land, and labour, as part of its pre-Budget recommendations.

According to PHDCCI, the current banking standards cause banks to seek large levels of primary security and collateral from MSMEs, which has a negative impact on their competitiveness and growth.

The chamber recommended that the government focus on streamlined loan disbursements at reasonable interest rates for businesses as opposed to improved liquidity for micro, small, and medium-sized enterprises (MSMEs).

Finance Minister Nirmala Sitharaman is scheduled to present the Budget on February 1.