President of PHD Chamber of Commerce and Industry (PHDCCI), Hemant Jain, presented a series of recommendations aimed at enhancing India’s economic growth.
The suggestions focused on rationalizing the tax structure, bolstering the manufacturing sector, and creating an enabling environment for Micro, Small, and Medium Enterprises (MSMEs) to thrive along with significant reduction in costs of doing business
PHDCCI suggests to reduce tax rates for individuals and Limited Liability Partnership (LLP) firms to 25% as this reduction would not only ease the financial burden on businesses and individuals but would also stimulate investment and economic activity across sectors.
A simplified tax structure can reduce compliance costs and increase disposable income, boosting consumer spending. This increased demand encourages business expansion, driving economic growth. Additionally, the reduction in tax burdens can help mitigate inflationary pressures too, said Mr. Hemant Jain.
Mr. Hemant Jain emphasized the need to completely remove the inverted duty structure that currently exists in several industries, particularly in sectors such as cement, aluminium, steel, packaging material, paper and paperboard industry. The inverted duty structure leads to higher costs for domestic manufacturers, hindering their competitiveness in the global market.
Eliminating these inefficiencies would go a long way in bolstering the manufacturing sector, said Mr. Jain
Industry body, PHDCCI further pointed out that the ease of doing business in India needs to be further improved and percolated at the ground level. This includes reducing the cost of doing business, particularly in terms of capital, power, logistics, land, and compliance costs.
According to the PHDCCI, simplifying procedures and cutting down on regulatory burdens would make it easier for businesses to thrive and would encourage both domestic and foreign investments in India.
With these measures in place, India can realize its potential as a global manufacturing hub, improving its position in international trade, said Mr. Jain
PHDCCI is expecting a significant increase in the size of the Union Budget from Rs. 48.2 lakh crore in 2024-25 to over Rs. 51 lakh crore for 2025-26. Capital expenditure, which is crucial for infrastructure development, should also see a marked increase, with PHDCCI suggesting a rise from Rs. 11.11 lakh crore in 2024-25 to over Rs. 13 lakh crore in 2025-26.
Such a capital expansion is seen as critical for enhancing demand trajectory, creating employment opportunities, and spurring overall economic growth, says PHDCCI
The chamber has also highlighted the need for the government to enhance the manufacturing sector, increase infrastructure investment, and promote innovation. The manufacturing sector in India currently contributes around 16% to the GDP, and we should aim to increase this share to 25% by 2030.
To achieve this ambitious target, reforms are needed to enhance productivity and competitiveness in the manufacturing sector supported by strong demand trajectory.
PHDCCI’s suggestions focus on addressing the key cost drivers in manufacturing, such as the high cost of capital and logistics. Reducing these costs will enable Indian manufacturers to compete effectively in global markets and help increase share of manufacturing output in GDP