Budget 2024: India Inc CFOs call for strong compliance reforms

As India eagerly awaits the upcoming Union Budget, scheduled for February 1 and to be presented by Finance Minister Nirmala Sitharaman, key voices from India Inc's Chief Financial Officers (CFOs) are advocating for impactful compliance reforms.
The CFOs, representing diverse sectors, have voiced concerns and expectations for Budget 2024, emphasizing the need for comprehensive changes in compliance regulations. The key focus areas include GST adjustments, MSME support, real estate facilitation, and streamlined labour laws.

During a recent panel discussion hosted by ETCFO, prominent CFOs voiced shared concerns and recommendations for Budget 2024. Sandeep Modi, CFO of Hindustan Zinc, applauded the strides in GST compliance but highlighted a persistent challenge faced by vendors in issuing tax invoices for large projects.

Modi emphasized the need for crediting advances, proposing practical relief. He also advocated for tax deductions on CSR contributions and recognizing GST on CSR as part of business activity.

Similarly, Vikas Wadhwan, Group CFO, PropTiger.com, highlighted GST-related challenges. He proposed the implementation of a simplified and uniform GST rate structure for real estate transactions.

Wadhwan emphasized the potential benefits of a single-window clearance, envisioning it as a mechanism to alleviate the compliance burden and foster collaborative efforts for industry growth.

Anand Agarwal, CFO of V-Mart Retail, also raised key concerns during this discussion. He highlighted labor law complexities affecting new business setups and emphasized the need for streamlined processes.

Agarwal called for greater synchronization in Provident Fund and ESI schemes, urging the government for further refinement. He also advocated for practical disclosure norms for listed companies.

On taxation, Agarwal praised GST progress but urged uniformity in rate structures for simplicity. He opposed the MSME reservation system and criticized the 45-day payment cycle.

Kunal Kundu, Economist at Societe Generale, echoed the sentiments expressed by India Inc CFOs. He specifically endorsed a holistic approach to compliance for MSMEs, advocating for negotiations on payment terms to be managed by the involved parties. Kundu emphasized the importance of avoiding a rigid 45-day timeline, urging a practical approach to address the challenges faced by MSMEs in compliance.

Watch the full panel discussion here:

CFOs' Budget Expectations And Economic Outlook

In a collective outlook, Finance Veteran Hemant Ruia envisions a continued focus on infrastructure and digital advancements, with potential incentives for electric vehicles (EVs). He highlighted that focus on infrastructure will be beneficial for the logistics sector.

However, CFO of V-Mart Retail, foresees an interim budget with no major policy changes, emphasizing potential expansions of popular schemes to enhance implementation in critical sectors like housing and health insurance.

Sandeep Modi, echoes Agarwal's view on an interim budget, expressing optimism for fiscal prudence. Modi anticipates a focus on manufacturing, capital expenditure, and potential extensions of schemes like the Production-Linked Incentive (PLI) to various sectors, including mining, with incentives for EVs.

Similarly, Vikas Wadhwan, Group CFO of PropTiger.com, aligns with the sentiment, expecting continued progressive measures in manufacturing, infrastructure, and rural development, alongside possible reductions in individual taxation and support for real estate and EV sectors.

Kunal Kundu, Economist, emphasizes addressing weak domestic consumption, rural stress, and employment challenges in the upcoming budget. He advocates for extending schemes like PLI to employment-intensive sectors, maintaining a balance between industry support and fiscal consolidation.

Kundu suggests a careful approach to GST rationalization to alleviate the tax burden, emphasizing the importance of balancing income tax reduction with indirect tax rationalization for the middle class's well-being.

Paving the Way to a Five Trillion Economy

Kunal Kundu, the Economist, underscores the imperative to invest in health, education, and skill development for sustainable economic growth. Advocating for a balanced development approach, he stresses the need to empower the rural economy. Kundu emphasizes bridging the skills gap and fostering a conducive environment for a 5 trillion economy, with an eye on a future 10 trillion economy.