From the upcoming budget, India Inc (Corporate Sector) hopes that the government will pay special attention to four important things. Improving infrastructure, promoting value addition in manufacturing, accelerating green transition and providing easy loans to MSMEs. Sustaining growth in today’s environment depends more on strong foundations than short-term relief packages. Fundamental reforms are necessary to maintain corporate confidence amid global slowdown, trade uncertainty and structural challenges related to competition.
The imposition of tariffs by the US, geopolitical tensions and supply chain changes have further increased the importance of keeping costs low, policy stability and timely completion of projects. Investment and business decisions are also being affected by this. However, India’s domestic economy is in a better condition than before. Government investment, tax reforms and strong balance sheets of companies are supporting this. The challenge now is to convert this strength into long-term investment-led growth, strengthen manufacturing and make exports sustainable.
Emphasis on infrastructure should continue
In the last decade, the government has made huge investments in roads and railways, which has improved logistics. Budget support has increased by an average of 12% annually between 2018 and 2026. Logistics cost has now come down to around 8%. Railways is a cheap and effective transport medium, hence more investment in it is necessary. Also, private sector participation should be increased by continuing capital expenditure on roads.
Promotion of value addition in manufacturing
India wants the contribution of manufacturing in GDP to increase from 17% to 25%. The PLI scheme has helped, but there are still challenges related to cost and local manufacturing. R&D, skill development and sectors like electronics, EV, battery, data center, solar should get tax incentives in the budget.
It is necessary to accelerate green energy transition
India has set a target of reducing carbon emissions by 2030 and net-zero by 2070. Companies need policy clarity and long-term funding to transition to clean energy. It is expected from the budget that financing for green projects will become easier and clean energy industrial clusters will be promoted.
Loan should be easy for MSME
MSMEs contribute about 30% of India’s GDP and 45% of exports, but they have the problem of expensive loans and delays in payments. There should be a provision for cheap and quick loans in the budget. Mudra loan limit should be increased and ready-to-use industrial parks should be developed for MSMEs.