Every budget poses a dilemma for government “to do or not to do”. Economists call it the time consistency problem. This annual tug-of-war plays out in New Delhi annually just before the Union Budget. This year, it comes to the fore more starkly with its stakes driven up by looming Lok Sabha polls, after which a new government must present actual plan of inflows and outflows for the fiscal year.
The National Restaurant Association of India on Monday urged the government to restore input tax credit to restaurants while increasing the GST rate to 12 per cent from the current 5 per cent, ahead of the upcoming Union Budget. In a letter to Finance Minister Nirmala Sitharaman, the National Restaurant Association of India (NRAI) also called for an equitable and fair e-commerce policy, saying balanced policies and regulations are required to enable a level playing field, where platforms can continue to innovate, while restaurants, delivery partners and consumers are protected from potentially exploitative practices.
The restaurant industry was one of the sectors that suffered the most during the pandemic but showed great resilience to survive and has since been on a steady path of recovery. If the sector gets a certain amount of policy and budgetary support in the upcoming Budget, it will propel the sector towards an accelerated pace of growth, NRAI said in a statement.
Further, the government may limit the increase in its overall spending to around 10% in the interim budget for FY25, from the budget estimate for this year, as it aims to balance the need for sustained growth with fiscal consolidation imperatives, people aware of deliberations said.
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