The Confederation of Indian Industry (CII), the non-governmental trade association and advocacy group founded in 1895, has recommended a three-pronged strategy for Budget 2021 centring around the key themes of growth, fiscal consolidation, and strengthening of the financial sector to help overcome the impact of Covid-19 on the economy. Fiscal management Look at deficit management from a 3-year perspective given that the complete economic recovery is expected only in FY 22.Take forward the effort of the last budget that provided details on off budget expenditures and their financing as an Annexure and bring in greater transparency in deficit numbers.Consider aggressive disinvestment of both loss-making and a few profit-making PSUs to augment revenues Explore sale or leasing of government’s surplus land. Financial sector reforms Bring down government stake in PSBs to below 50% through the market route, over the next 12 months, except for 3-4 large PSBs. Create government owned, professionally managed Development Finance Institutions (DFIs) to finance key sectors of the economy. Infuse equity in NABARD for financing agriculture and rural sector, SIDBI for financing MSMEs and IIFCL for financing infrastructure. An enhanced judicial capacity for IBC the current resolution process is too time consuming. Facilitate multiple bad banks, by allowing Alternate Investment Funds (AIFs) to buy bad loans. Create a single specialized agency, manned with relevant expertise to investigate financial sector frauds. Improve coordination between the existing multiple agencies and strengthen their expertise. Create Market Intelligence Units within the Ministry of Finance and the financial sector regulators, to pick up early signs of financial distress/fraud. Stronger role for FSDC, to ensure seamless coordination amongst regulators for protecting the interests of depositors and small investors. Government expenditure for reviving demand and boosting productivity of the economy Increase the expenditure on healthcare to 3% of GDP over 3 years Infrastructure for both rural and urban areas To build an environment friendly modern economy Provide immediate attention to private investments and creation of jobs. Private investments Ensure stability of long term interest rates, at current levels. Ensure a stable tax regime. Ensure sanctity of contracts for government and quasi government entities, as well as for state governments. Meaningful support for job creation Section 80JJAA, provides for deduction of 30% on emoluments paid to new employees, for three years. This is available upto an emolument of Rs 25,000 per month. Raise the cap to Rs 50,000 per month. Direct tax recommendations Extend Vivad se Vishwas scheme: As the operational challenges arising out of COVID are likely to continue for some more time, extend the scheme till 31 December 2021. Appeals pending on or before 30 June 2021 could be considered eligible for the Scheme. Assessment, Litigation and Demand: Set timelines for disposal of appeals by Commissioner (Appeals) on the lines of timelines set for Dispute Resolution Panel. Restrict number of adjournments by either party to two. Provide option of fast tracking appeals at Commissioner and Tribunal levels on payment of a higher fee. Allow all taxpayers, irrespective of the nature of adjustments to approach the DRP. There could be monetary thresholds, if required. Increase monetary thresholds for the department to appeal. For example, Rs 1 crore for Tribunal, Rs 2 crore for High Court and Rs 5 crore for Supreme Court. Increase the number of Commissioner Appeals, benches at Tribunal and tax benches at High Court for speedy resolution. Indirect tax recommendations Move towards competitive import tariffs over 3 years, with lowest or nil slab on inputs or raw materials (say 0-2.5%), standard slab for final products (say 5.00-7.5%) and intermediates at intermediary level (say 2.5-5%). Exceptions could be considered on some products in the context of policy actions such as the Phased Manufacturing Programmes (PMP) and Production Linked Incentive (PLI) schemes, for promoting domestic manufacturing, besides some of the sectors, where tariffs are on the higher side owing to compelling reasons.