Ficci VP Outlines Four Budget Imperatives for India's Future-Ready Economy
Senior Ficci leadership has identified four critical budget imperatives for India's economic development: building self-reliance through strategic manufacturing, expanding manufacturing's GDP share from 17% to 25%, creating enabling policy frameworks to reduce litigation and support exports, and implementing next-generation reforms including customs rationalization and corporate bond market development. The comprehensive approach emphasizes coordinated government action to transform manufacturing into a key driver of employment and economic resilience.
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A senior industry leader has presented four strategic budget imperatives that could shape India's path toward building a future-ready economy. The recommendations, outlined by the Senior Vice President of Ficci and Chairman of The Sanmar Group, focus on comprehensive reforms spanning manufacturing, policy frameworks, and structural economic changes.
Building Self-Reliance Through Strategic Manufacturing
The first priority centers on reinforcing atmanirbharta by prioritizing strategic sectors critical for growth, competitiveness, and national security. The approach emphasizes a sector-specific, value-chain-driven manufacturing strategy designed to convert rising domestic consumption into local production and employment opportunities.
| Strategic Focus Areas: | Key Objectives |
|---|---|
| Domestic Capability: | Build competitiveness in critical sectors |
| Value Chain Strategy: | Convert consumption to local production |
| Global Integration: | Enable firms to scale and integrate globally |
| Supply Chain Security: | Reduce vulnerability to external disruptions |
As India's consumer market expands, the strategic imperative involves meeting domestic demand through globally competitive domestic manufacturing. This requires targeted support for key value chains, enabling firms to scale, innovate, and integrate into global supply networks.
Manufacturing-Led Growth Strategy
The second imperative focuses on expanding manufacturing's contribution from approximately 17% of GDP to 25%, which is considered critical for employment generation. The manufacturing sector's growth creates a high multiplier effect, generating direct factory jobs while supporting employment across logistics, small firms, services, and regional supply chains.
| Manufacturing Ecosystem: | Impact Areas |
|---|---|
| Target Sectors: | Electronics, renewable energy, defence, pharmaceuticals |
| Additional Focus: | Auto components, food processing, chemicals |
| Employment Effect: | Direct factory jobs plus supply chain employment |
| GDP Contribution Goal: | Increase from 17% to 25% |
The strategy requires a fundamental mindset shift to place manufacturing on the same strategic level as services. In an environment where trade is increasingly weaponized, tariff support becomes essential to protect India's SME backbone from unfair competition.
Enabling Policy Framework for Business Growth
The third priority addresses targeted interventions in taxation and trade facilitation to improve cost competitiveness and reduce uncertainty. A significant concern involves litigation reduction, particularly addressing the pendency of income tax appeals.
Key reform areas include:
- Time-bound disposal of cases, especially high-pitched assessments and matters with complete submissions
- Fast-track resolution system combining simplified case handling with detailed scrutiny of complex matters
- Enhanced RoDTEP scheme allocation to neutralize embedded taxes for exporters
- Long-term policy certainty to offset structural cost disadvantages
| Policy Reform Areas: | Specific Measures |
|---|---|
| Litigation Reduction: | Time-bound disposal of pending appeals |
| Export Support: | Enhanced RoDTEP scheme allocation |
| Trade Facilitation: | Faster processing and reduced barriers |
| Tax Certainty: | Predictable tax regime implementation |
Next-Generation Economic Reforms
The fourth imperative encompasses customs rationalization initiated in previous periods, focusing on simplified tariff slabs and elimination of inverted duty structures. The reforms prioritize manufacturing scale, employment generation, and supply-chain resilience.
The tariff policy approach views customs duties as strategic policy instruments rather than ideological choices between protectionism and free trade. When tariffs catalyze investment and improve capacity utilization, income growth can outpace price increases, making moderate inflation economically manageable.
| Reform Components: | Implementation Focus |
|---|---|
| Customs Rationalization: | Simplified tariff slabs and duty structures |
| Corporate Bond Market: | Diversify financing beyond bank credit |
| State-Level Coordination: | Link financial assistance to reform progress |
| Long-term Capital Access: | Expand market access for mid-size firms |
Strategic Implementation Framework
The comprehensive approach requires coordinated, whole-of-government action encompassing policy design, budgeting, and execution. Manufacturing expansion, supported by calibrated tariffs and reforms in land, labor, logistics, and regulation, can generate large-scale employment and expand the tax base.
While many implementation levers rest with states, the central government can play a catalytic role by linking financial assistance and borrowing capacity to state-level progress on land and power reforms. Deepening the corporate bond market remains essential to diversify financing options and improve access to long-term capital for growth-stage firms.
The budget presents an opportunity to consolidate and strengthen the foundations of India's economic advancement, focusing not merely on accelerating growth but sustaining it through enhanced productivity and competitiveness.
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