Budget 2025 Expectations: Industry body CII suggests measures for quality fiscal consolidation

Budget 2025 Expectations: As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2025 on Saturday, February 1, all eyes are on the upcoming decisions that will shape India's economic landscape. This will mark her eighth consecutive budget presentation under the Narendra Modi-led NDA 3.0 government. The speech, scheduled to begin at 11:00 AM in the Lok Sabha, is expected to be a key moment for the country’s economic trajectory.

Amid these expectations, the Confederation of Indian Industry (CII), a non-governmental business and industry body, has outlined several recommendations to ensure the quality of fiscal consolidation moving forward.

Adhering to Fiscal Discipline

The foremost priority, according to CII, should be adhering to the fiscal deficit target, with a focus on maintaining fiscal discipline. This involves a dual approach: reducing expenditures through subsidy rationalisation and increasing revenue through strategic disinvestment and other measures.

Key suggestions from CII include:

1. The government "should revert to the FRRBM targets and lay out a road map for fiscal consolidation over the next three years, which should be announced."

2. All avenues for non–tax revenues should be explored for increasing inflows.

3. Disinvestment has to be undertaken aggressively (Rs 50000 crores).

4. There are 67 sick PSUs, whose rehabilitation or winding up proposals have been referred to the Board of Reconstruction of Public Sector Enterprises. It is recommended that the government unlocks the assets of these PSUs by monetizing land, plant & machinery, etc.

5. Diluting government stake in public sector banks to 51 per cent is another suggestion for revenue generation.

6. A 20 per cent rationalisation of subsidy expenditure could result in savings to the tune of Rs 50,000 crore.