Corporate tax cut, expansion of PLI scheme top India Inc's budget wishlist
As the government gears up to present the union budget for the next fiscal year, industries have highlighted their expectations to boost investment and manufacturing in the country. In a pre-budget consultation meeting chaired by Finance Minister Nirmala Sitharaman, industry bodies like FICCI and CII emphasized on maintaining the status quo on corporate tax rates and broadening the scope of key schemes.
Status quo on the reduced corporate tax rate of 22% for existing companies and 15% for new manufacturing units has been proposed. This is aimed at retaining the improved investment climate. Representing capital market players, industry lobbies also called for widening the ambit of the Production Linked Incentive (PLI) scheme to include labor-intensive sectors badly impacted by the pandemic.
The government was urged to enhance capital spending by 25% to Rs. 11.8 lakh crore for developing infrastructure across the nation. Reduction in compliance burden and power costs found a mention too. FICCI suggested rationalizing the GST structure to three major slabs and including sectors currently outside the tax regime.
Industry leaders highlighted the need for self-reliance in electronics but to not restrict laptop imports until local production scales. They advocated continuing ease of access until India is capable of fulfilling demand on its own. Measures to build tier 2 and 3 cities, smart villages and enhance manufacturing competitiveness through labor law simplification were proposed.
Overall, industries expect the upcoming budget to keep growth momentum through continued fiscal support, incentivizing production and streamlining taxes. If their proposals are considered, it could boost investments and accelerate India's economic recovery in the fiscal year ahead.
