Budget 2025-26: CII calls for cut in excise duty on fuel, consumption vouchers to stir demand
Union Budget: CII recommends lowering excise duty on fuel to boost consumption, reduce inflation, and increase disposable income in its pre-budget suggestions for 2025-26. The proposal includes reducing marginal tax rates for incomes up to Rs 20 lakh and increasing benefits under key government schemes to enhance rural recovery.
The budget could also consider reducing marginal tax rates for personal income up to Rs 20 lakh per annum.
This would help trigger the virtuous cycle of consumption, higher growth and higher tax revenue, said CII. ET Year-end Special Reads How India's political landscape changed after assembly polls in eight states Trent, Zomato among 33 biggest wealth creators this year.
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"The central excise duty alone accounts for approximately 21 per cent of the retail price for petrol and 18 per cent for diesel.
Since May 2022, these duties have not been adjusted in line with the approximately 40 per cent decrease in global crude prices.
Lowering excise duty on fuel would help reduce overall inflation and increase disposable incomes," the industry body said.
Chandrajit Banerjee, Director General, CII, said domestic consumption has been critical to India's growth story, but inflationary pressures have somewhat eroded the purchasing power of consumers.
"Government interventions could focus on enhancing disposable incomes and stimulating spending to sustain economic momentum.
Persistent food inflationary pressures particularly impinge upon low-income rural households who allocate larger share to food in their consumption basket", he added.
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In its pre-budget proposals, CII has also recommended an increase in the daily minimum wage under the MGNREGS from Rs 267 to Rs 375 as suggested by the 'Expert Committee on Fixing National Minimum Wage' in 2017, with the industry body estimating that this will entail an additional expenditure of Rs 42,000 crore.
Further, it urged the government to raise the annual payout under the PM-KISAN scheme from Rs 6,000 to Rs 8,000. Assuming 10 crore beneficiaries, this will entail an additional expenditure of Rs 20,000 crore, CII said.
The Confederation of Indian Industry (CII) also sought an increase in the unit costs under the PMAY-G and PMAY-U schemes, which have not been revised since the scheme's inception.
The CII suggested the introduction of consumption vouchers, targeted at low-income groups to stimulate demand for specified goods and services over a designated period.
The vouchers could be designed to be spent on designated items (specific goods and services) and could be valid for a designated time (like 6-8 months), to ensure spending.
The beneficiary criteria can be defined as Jan-Dhan account holders who are not beneficiaries of other welfare schemes.
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