Finance and Corporate Affairs Minister Nirmala Sitharaman chaired a pre-Budget discussion with the country's financial sector and capital market on Thursday, marking a second round of pre-Budget talks after she met a group of economists the previous day. 

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A few participants made a case for tax sops in the upcoming full-year Budget, which comes after a Vote on Account in February, and requested the government to fix certain issues related to arbitrage in taxes.

The 12 participants included Morgan Stanley India Head Arun Kohli, Finance Industry Development Council Co-Chairman Raman Agarwal, HDFC AMC MD and CEO Navneet Munot, SBI Capital Venture MD and CEO Prem Prabhakar, and PNB MD and Former IBA Chairman Atul Kumar Goyal. 

Other participants in the meeting were Commodity Participants Association of India President Sanjay Rawal, Spark Capital Advisors MD-Institutional Equities Ganeshram Jayaraman, Muthoot Group MD George Alexander, Kotak Mahindra AMC MD and part-time PMEAC member Nilesh Shah, NABARD Chairman Shaji KV, IVCA & Public Equity Association Chairman Ashley Menezes, and Kotak Alternate Assets Managers MD Srini Sriniwasan.

"I shared with the Honourable Finance Minister that under the aegis of our regulator SEBI, mutual funds have spread financial awareness. We have enlisted more than four crore Indians to participate in the journey of Viksit Bharat and secure their financial freedom. We need to reach out to far more Indians now to secure their financial freedom," said Shah of Kotak Mahindra AMC after the meeting.   

Kohli of Morgan Stanley India said tax policies in the country need to be stable and long-term-oriented.

Some of the players pitched for deepening the market and providing some tax incentives, said Muthoot. 

The Union Minister touched upon a wide range of areas in the talks, also attended by Minister of State for Finance Pankaj Chaudhary, and the Secretaries of the Finance, Expenditure and Economic Affairs departments. 

Meanwhile, the full Budget for the current financial year, which ends on March 31, 2025, is expected to be presented in Parliament in July. 

What is the difference between a Vote on Account and a full-year Budget?

A vote on account is a temporary provision for a government to meet its expenses in an election year and is followed by a full-year Budget by a new government that assumes office after the election. 

A full-year budget outlines the government's revenue and expenditure for the entire fiscal year, including detailed allocations for various sectors, new initiatives, and policy changes.

The main difference between a Vote on Account and a full-year Budget lies in the duration and scope of financial planning between the two mechanisms.

With inputs from agencies