Ahead of the crucial Union Budget 2026, the PHD Chamber of Commerce and Industry (PHDCCI) has presented a comprehensive set of recommendations to the government, focusing on turbocharging India's manufacturing sector and simplifying the tax landscape to boost economic growth.
Key Demands for a Competitive India
The industry body's pre-budget memorandum outlines several critical areas requiring government intervention:
- Rationalization of Personal Income Tax: PHDCCI has urged for an increase in the basic exemption limit and a revision of tax slabs to put more money in the hands of consumers, thereby stimulating demand.
- Boosting Manufacturing Prowess: A major push is recommended for the manufacturing sector through enhanced production-linked incentive (PLI) schemes and measures to improve the ease of doing business.
- Fueling Innovation through R&D: The chamber has proposed weighted tax deductions on investments in research and development, aiming to make India a global hub for innovation.
- GST Simplification: Streamlining the Goods and Services Tax structure by reducing the number of slabs and addressing compliance issues features prominently in their suggestions.
Building a Robust Economic Foundation
The recommendations are strategically designed to address multiple economic objectives. By incentivizing manufacturing, the proposal aims to create massive employment opportunities and reduce India's reliance on imports. Simultaneously, tax relief for individuals and corporations is expected to increase disposable income and encourage fresh investments across sectors.
The chamber emphasized that these measures are pivotal for India to maintain its position as the world's fastest-growing major economy and to achieve its ambitious goal of becoming a $5 trillion economy. The focus on R&D is particularly seen as a long-term strategy to build indigenous capabilities and move up the global value chain.
The Road to Budget 2026
As the government begins its preparations for the 2026 budget, the proposals from influential industry bodies like PHDCCI will be critically examined. The industry's call for a simplified tax regime and a manufacturing-centric approach sets the stage for what could be a transformative budget aimed at solidifying India's economic fundamentals for the next decade.
