New Delhi: The PHD Chamber of Commerce and Industry (PHDCCI) has urged the Finance Ministry to implement measures to streamline taxation, strengthen the manufacturing sector, and support Micro, Small, and Medium Enterprises (MSMEs) in its pre-budget recommendations.
During a meeting with Finance Minister Nirmala Sitharaman, PHDCCI President Hemant Jain emphasized the need for a simplified tax structure, citing its potential to boost economic growth by reducing compliance costs and increasing disposable income.
“Reducing individual and LLP tax rates to 25% would ease financial burdens, stimulate investment, and mitigate inflationary pressures,” Jain said.
Jain also called for the removal of the inverted duty structure in industries such as cement, steel, and paper, which he said undermines domestic manufacturers’ competitiveness.
The chamber stressed improving ease of doing business, particularly by reducing costs related to capital, power, logistics, and compliance. Simplifying procedures and reducing regulatory hurdles would attract both domestic and foreign investment, Jain added.
Push for MSME Support
PHDCCI highlighted the critical role of MSMEs in India’s economy, proposing a range of measures to bolster their growth. It suggested extending the overdue classification for MSME loans from 90 days to 180 days to prevent liquidity challenges.
It also recommended expanding the Interest Equalization Scheme to include MSME service exporters and extending the MSE Facilitation Councils’ scope to cover medium enterprises.
Manufacturing Growth and PLI Expansion
PHDCCI advocated for raising manufacturing’s GDP contribution from 16% to 25% by 2030. Reforms targeting high capital and logistics costs were proposed to enhance productivity and competitiveness.
Additionally, the chamber recommended expanding the Production Linked Incentive (PLI) scheme beyond the current 14 sectors to include industries like medicinal plants, handicrafts, and gems and jewelry.
Capital Gains Tax and Infrastructure Development
Jain expressed concerns about the recent increase in long-term capital gains tax on listed shares. He proposed abolishing the Securities Transaction Tax (STT) to ease the burden on investors and stimulate market activity.
The chamber also called for greater infrastructure development in Tier 2 and Tier 3 cities and smart villages to ensure balanced regional growth.
Focus on Gender Inclusion
PHDCCI urged the government to introduce initiatives to increase female labor force participation, currently at 32%. Targeted measures could drive inclusive growth and improve overall productivity, Jain said.
The recommendations were part of the chamber’s Pre-Budget Memorandum submitted to the Ministry of Finance.
