Tribune press service
New Delhi, December 30
Union Finance Minister Nirmala Sitharaman chaired pre-budget consultations with state finance ministers on Thursday. The meeting was also attended by some Chief Ministers and Deputy Chief Ministers, as well as senior officials from the States and the Center.
Union Finance Secretary TV Somanathan welcomed attendees and briefed them on the importance of this particular consultation meeting, according to an official press release.
“Most participants thanked the Union Minister of Finance for supporting their states / UTs financially during the worst months of the pandemic, by increasing borrowing limits, providing state-backed loans and through special assistance for capital expenditure.
- Increase in research and development expenses
- Infrastructure status for digital services
- Rationalization of income tax brackets
- Investment in online security measures
- Incentives for hydrogen storage and the development of fuel cells
The participants also made many suggestions to the Union Minister of Finance for inclusion in the budget speech. Suggestions included increasing research and development (R&D) spending, the status of infrastructure for digital services, streamlining income tax brackets, investing in online security measures and incentives. hydrogen storage and the development of fuel cells.
Regarding personal income tax, some state finance ministers have estimated that personal income tax brackets have risen sharply from 5 percent to 20 percent and 30 percent . Multiple surcharges on certain tiles push the personal income tax rate up to over 40%.
Noting that the Center has already reduced corporate tax rates to increase compliance and attract more industries, they felt that such an approach could also be applied to income tax brackets.
GST compensation for additional 5 years requested
Opposition-led states have called for an extension of the GST compensation period from two to five years. They also demanded a higher share from the Union government for centrally sponsored programs, as the pandemic impacted their income. GST compensation will end in June of next year.