Bolster manufacturing sector, consumption this budget: PHDCCI to FinMin

Ahead of the union budget 2024, which is set to be presented on the 22nd July, finance minister Nirmala Sitharaman kicked off pre-budget consultations on 19th June. In their pre-budget memorandum to the finance ministry, the PHD Chamber of Commerce and Industry proposed 10 reforms it deemed essential for India’s journey towards Viksit Bharat.

Amongst the proposals submitted were introducing reforms to enhance the share of the manufacturing sector in India’s GDP to 25% by 2030, and the expansion of the PLI scheme beyond its existing scope of 14 sectors. In addition to this, PHDCCI also emphasised on rationalising direct taxes for the middle class, infrastructure enhancement and smart village development, with special focus on tier-2 and 3 cities.

As per Sanjeev Agrawal, President, PHDCCI, “In order to strengthen the share of the manufacturing sector in the country's GDP, we recommend the status quo on the corporate tax rate at 22% for existing companies and 15% for new manufacturing companies incorporated after October 1, 2019. The middle class must be spared from the 30% tax rate and this rate must be applicable only to those with taxable income above Rs. 40 lakh, this will support consumption demand in this country”.

In addition to this, PHDCCI also emphasised on strengthening linkages between universities and industries for bettering research and development activities in the country, and also appealed for reducing cost of doing business. Here’s a snapshot of some prominent demands placed forth by the PHDCCI ahead of the budget :

1. Change in NPA classification limit from the present 90 days to 180 days
2. Fostering AI education, skill development and competitiveness in the service sector
3. Increase agricultural exports to US$100 billion in the next 3 years via increased public investments in infrastructure,
4. Ensure the presence of schools within a radius of 1 km, colleges within a 10 km radius and universities within a 25 km radius in the next five years.
5. Make health centres available within the radius of 1 km and hospitals within the radius of 10 km.
6. Propose a Voluntary Disclosure Scheme (VDS) for legal cases older than 10 years, offering settlement opportunities at a nominal 15% penalty.