The upcoming budget is expected to give a push to the ongoing post-pandemic recovery of the Indian economy by providing the necessary support for the growth and development of various industries
The Union Budget this year is one that is eagerly awaited by industry with expectations that it will give a boost to the economy that is slowly emerging from two years under the shadow of the pandemic. For the Arvind Mafatlal Group, our focus is on three areas that we hope the budget will address – rationalizing the capital gains tax structure, addressing the inverted duty structure in the textile industry, and promoting competitiveness in the Indian chemical industry.
Capital gains tax is a critical aspect of investment, and the current dynamic matrix for computing capital gains tax is a hindrance to the growing investor base in India. The prescribed multiple holding periods, differences in tax rates, and indexation create administrative hurdles and increase overall timelines. We hope that the budget will simplify the capital gains tax regime, making it easier for investors to invest in India.
The textile industry is faced with an inverted duty structure, which has resulted in the accumulation of input tax credits. To improve liquidity for the industry, we look to the budget to allow the cash refund of such accumulated credit, which will be a shot in the arm for the industry and encourage more investment. Additionally, the effective implementation of various incentive schemes announced by the government is the need of the hour. The disbursement of sanctioned but pending subsidies and grants under the existing TUF schemes could go a long way in improving the liquidity for the industry.
Atmanirbhar Bharat, the government’s clarion call for self-reliance, has been embraced by the chemical industry, but the industry, like textiles, also faces an inverted duty structure. The upcoming budget is an excellent opportunity to correct this issue that is hindering the competitiveness of the Indian chemical industry. We hope the government takes this opportunity to promote competitiveness, encourage innovation, and provide support for the growth of the Indian chemical industry.
The upcoming budget is expected to give a push to the ongoing post-pandemic recovery of the Indian economy by providing the necessary support for the growth and development of various industries. The nation awaits the budget with bated breath, hoping for a budget that will drive the Indian economy to new heights.
The author is Vice Chairman, Arvind Mafatlal Group.
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