Industry players optimistic of measures in Union Budget for economic growth: Deloitte

A Deloitte Survey has come to the conclusion that a vast majority of business leaders believe that the Production Linked Incentive (PLI) schemes have been beneficial and expect an extension to other sectors in the coming years.

The survey aimed to analyse the industry expectations from the upcoming Union Budget, from the standpoint of economic growth, trade agreements and exports. A total of 181 responses were collated from the survey across 10 industries.

An overwhelming number of survey respondents hope the general budget will fuel growth across industries by building strong domestic demand and focusing on capital expenditure and believe that it would define Amrit Kaal.

"Critical to this growth will be the pace of capital expenditure, infrastructure development and the need to boost infrastructure financing through private partnership. 60 per cent of respondents suggested raising funds through Indian Government bonds," the survey said.

More than 70 per cent of the respondents agree that various PLI schemes have been beneficial for the growth of their sector, with close to 60 per cent of respondents expecting an extension of the incentive in the coming years, Deloitte said.

The government has already rolled out the scheme with an outlay of about Rs 2 lakh crore for as many as 14 sectors, including automobiles and auto components, white goods, pharma, textiles, food products, high-efficiency solar PV modules, advanced chemistry cell and specialty steel.

The sectors, which are under consideration for an extension of the PLI scheme, are leather, bicycle, some vaccine materials and certain telecom products.

The survey said that as global uncertainties and an economic slowdown loomed across geographies, tax-related changes were expected to boost industry growth and were the most sought-after measures from the upcoming Union Budget.

An overwhelming majority of respondents see trade treaties as vehicles for increasing investment flows and providing an exchange of emerging technologies to strengthen their role in global value chains (GVCs).

The inclusion of micro, small & medium enterprises (MSMEs) in the GVC will bring in sustainability to industrial growth and improve trade flows, as per the survey. Besides easing tax compliance, 45 per cent of respondents anticipate the government to reduce tax litigation, while 44 per cent expect to gain clarification of some TDS-related provisions.

Additionally, the industry is expecting the simplification of the capital gains tax structure and removal of ambiguities in the interpretation of tax, thereby making compliance easier.

Sanjay Kumar, Partner, Deloitte Touche Tohmatsu India LLP, said that despite global uncertainties, the Indian economy had been resilient and was well on its way to a growth rate of 7 per cent.

"Industry players are optimistic about the upcoming budget and expect a slew of measures for economic growth, with a strategic focus on infrastructure development, boosting exports, easing compliances and leading the nation towards carbon neutrality," he added.