Industry chambers during the pre-Budget consultation with the Finance Ministry on Monday called for a reduction in personal income tax rates to increase disposable income for the middle class, a reduction in excise duty on fuel, and measures to boost employment-intensive sectors amid weak consumption trends in the country. Challenges faced by micro, small, and medium enterprises (MSMEs) also came up for discussions.
Among other issues, the industry bodies also raised concerns over “significant delays” in clearing input items at ports and have called for streamlining the documentation process to reduce customs clearance delays. This comes as India’s imports in November surged to a record high of nearly $70 billion, widening the goods trade deficit to $37.8 billion and raising fears of goods dumping by China, amid already declining exports to the European market.
Speaking to the media after the meeting, Confederation of Indian Industry (CII) President Sanjiv Puri remarked that while the Indian economy is performing well, global challenges persist, reported the Press Trust of India.
“We are seeing the dumping of many products by China in various parts of the world, including India. The climate emergency also impacts food security, nutrition, and inflation. In this context, we have made several suggestions,” Puri said.
He added that the CII had proposed measures to boost sectors with significant employment potential, such as garments, footwear, tourism, and furniture, along with targeted support for MSMEs and initiatives to integrate India into global value chains.
“To stimulate consumption, we suggested providing relief on income tax for incomes up to Rs 20 lakh by adjusting marginal tax rates. This would increase disposable income, boost consumption, and enhance revenue buoyancy.
“We have also recommended a slight reduction in excise duty on petroleum products, which would put more disposable income in the hands of consumers and create a virtuous cycle of growth,” Puri added.
From the government’s side, the meeting was attended by the Finance Minister, Finance Secretary, Secretary of the Department of Investment and Public Asset Management (DIPAM), Secretaries of the Department of Economic Affairs, and the Chief Economic Adviser, among other senior officials.
On customs clearances, the Federation of Indian Chambers of Commerce & Industry (FICCI) said that extensive documentation requirements for Bureau of Indian Standards (BIS) certification were causing significant delays in customs clearance. Meanwhile, CII’s Puri proposed a three-tier customs tariff structure to help India integrate into global value chains.
“Adopt a three-tier customs tariff structure: inputs at 0–2.5 per cent, intermediates at 2.5–5 per cent, and final goods at 7.5 per cent over time, with certain exceptions. Develop an integrated foreign trade, investment, and industrial policy,” Puri said during the meeting.
FICCI also pointed out that BIS registration and compliance requirements for importers were time-consuming, leading to shortages of certified products. The chamber proposed streamlining the BIS certification process by improving its online application system, introducing expedited procedures for critical products, increasing awareness through workshops, and pursuing Mutual Recognition Agreements (MRAs) with other countries to speed up the process.
The lack of adequate BIS-certified vendors in India further exacerbates the issue, FICCI noted, arguing that imposing BIS compliance requirements without sufficient vendor supply hampers ease of doing business. It recommended that the government publish a list of BIS-certified vendors for newly regulated products to simplify compliance for importers.
Industry bodies also raised concerns about the dumping of surplus Chinese goods globally, including in India, as well as challenges posed by the “climate emergency” to food security and inflation during the pre-Budget consultation meeting.
Sanjay Nayar, President ASSOCHAM said that despite the policy for collateral-free loans, MSMEs still face challenges in accessing credit.
“Banks often request personal property collateral and charge higher interest rates, hindering credit access. He stated that it must be made mandatory for banks to disclose the number and amount of collateral-free loans granted periodically. He suggested that the upcoming Budget provide an additional allocation or net to enhance credit flow to the MSMEs, much like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) launched during COVID, which proved to be a lifeline driving the growth of MSMEs,” Nayar said.
FICCI further said that the increasing number of nuclear families in India, coupled with the rising demand for dual-income households, has significantly heightened the need for childcare and elderly care services.
