Incentives To Manufacturing, Cut In Taxes Amongst Major Budget Expectations Of India Inc

Continued focus on investment in infrastructure, further incentivising manufacturing and sustained efforts in ease of doing business, pushing through disinvestment and leaving more money in the hands of middle and lower-middle-class people are among the major expectations of India Inc, as per a survey released by ASSOCHAM on Tuesday.

The survey revealed that the industry is optimistic about economic recovery and embracing the 'new normal' following the Covid period, challenging the geopolitical situation and slowdown or recession fears in several important economies of the world.

“While more support would be needed in coming times, the industry maintains hope of continued government support and collaboration with the private sector to realise the vision of becoming a USD five trillion economy," it added. 

More than two third of the respondents in the survey stated that the government should reduce the tax rates in income tax and rework the exemption limit leaving more disposable income in the hands of consumers. 

''The economy needs both robust demands across different sectors. This would eventually lead to newer investment, giving a double push to growth that would be a catalyst for job creation on a large scale,'' said Deepak Sood, Secretary General, ASSOCHAM.

Despite global challenges, it is expected that the Indian economy is likely to grow by 6.8 to 7 per cent in the medium term, buoyed by a revival in the capital formation cycle. This growth projection is in line with the International Monetary Fund’s forecast of 6.8 per cent in the current fiscal year and 6.1 per cent in the next.  

Amid the continuing fear of Covid around the world, the government should also support the healthcare sector in the Union Budget 2023-24, followed by education, micro, small and medium enterprises (MSME) and agriculture to provide a cushion to the economy and ensure that no disruptions are caused to the supply chain across different economic and social sectors.

A growing economy demands a constant supply of skilled manpower. Vocational education and skill development programs have been a priority in last year’s budget as well to boost employment in the country. A similar priority in addressing the unemployment issue through skill upgradation should continue.

It added that industry people want a boost to the infrastructure and housing sector as well as give further incentives to the companies to hire more people.  

The government has taken much-needed steps to support the Indian industry and push post covid recovery of the economy. The introduction of PLI schemes is one of the important measures taken by the Government. A view emerged that the scheme is creating a lot of buzz and more and more companies are committing new investments in manufacturing, taking advantage of the scheme.   

"The tax rates for individuals have not been changed since FY 2017-18, apart from the new tax regime, which is subject to onerous conditions. Accordingly, the majority of the respondents suggested reducing the effective rate of personal income tax," the survey added.