Budget Expectations: Industry body Ficci suggests capex increase of 15%, top share for healthcare

As India awaits the Narendra Modi government’s first Budget 3.0, due on February 1, expectations are rising with hopes of major economic reforms and income tax relief. Finance Minister Nirmala Sitharaman will present what is likely to be her eighth Budget in a row, including the Interim Budget 2024. The Federation of Indian Chambers of Commerce & Industry (FICCI), an industry body, has revealed 11 important things it expects from the next. Union Budget.

Here is a summary of what trade association Ficci expects from the 2025 budget, as submitted to the Treasury:

1. Ficci expects the Center to maintain its investment momentum: The industry body has proposed a 15 per cent year-on-year increase in government capex for the financial year 2025-26 (FY26). In the last budget, the government allocated a record amount of Rs 11.11 lakh crore.
2. The industry body demanded the creation of more inter-state institutional platforms in line with the GST Council, particularly aimed at reforms in areas such as land, labor and energy.
3. Simplifying the tax process: An industry body has suggested that multiple rates of tax deducted at source (TDS) or tax collected at source (TCS) be scaled up to a two- or three-tier rate structure that will avoid class conflicts and prevent. restriction of working capital in the industry. It also suggested to do away with the practice of imposing TDS or TCS on transactions subject to GST as relevant information is already available through GST filing.
4. An independent dispute resolution forum for efficient and timely resolution: In order to reduce litigation in matters directly related to taxation, Ficci proposed the introduction of a new forum consisting of independent experts such as retired Supreme Court judges or Supreme Court judges, retired presidents or vice presidents of courts. , or professionals such as lawyers or CAs who have little experience dealing with disputes at the assessment or post-assessment level.
5. The industry body has highlighted the need for an enabling policy framework that can direct resources to green and transition areas.
6. Ficci suggested that the government provide some tax exemptions on daycare costs to support women’s participation in the economy. The government may consider a special tax exemption up to a specified limit for working women for expenses incurred in childcare for children up to five years of age, according to the industry association.
7. Defense confidence: The trade body has suggested that only defense products made in India or made in collaboration with India be allowed to be procured from the country. It suggested that steps be taken to increase research efforts to develop technologies to keep the Indian armed forces at the forefront in areas such as robotics, quantum computing, sensors, hypersonics, directed energy, and AI and ML. It also suggested setting up a defense export promotion agency that could work with the armed services, their foreign agencies, DPSUs, private manufacturers, the MEA, Indian embassies, and the MoD, and liaise with foreign governments and buyers.
8. Farm prosperity: The industry body has suggested establishing an agricultural yield target in the bottom 100 districts through the aspirational district plan. In addition, a national program should be launched to develop 3 million farm professionals in five years to provide new technologies and services to farmers, according to Ficci.
9. Measures to encourage domestic PCBA production: The industry body has suggested that the government may look at a 25 percent difference in custom duty on Printed Circuit Board Assemblies (PCBAs) compared to the final product. For example, if the tax on a finished electronic product is 20 percent, the PCBA of this finished product may be subject to a custom duty of 15 percent, according to Ficci.
10. Basic Education: The industry body has proposed the launch of a Prime Minister-led information, education and communication (IEC) campaign to increase national awareness of foundation literacy numeracy (FLN) to improve early childhood education in the country.
11. More motivation in health care: Ficci proposed an increase in the share of health care from 2.1 percent to 2.5 percent of GDP, a move that the industry association believes can help strengthen the infrastructure of health care, ensure equal access, and get closer to Universal Health Coverage. (UHC) goals. The industry sector has also proposed to double the deduction of health insurance premiums under Section 80D of the Income Tax Act to Rs 50,000.