Tue Jan 28 23:10:00 IST 2025: **India Inc. Urges Major Reforms in Upcoming Budget**

**Mumbai, January 28, 2025** – Indian businesses are calling for significant economic reforms in the upcoming Union Budget 2025, to be presented on February 1st. With India’s GDP growth slowing to 5.4% in the second quarter of FY 2024-25, and consumer sentiment remaining sluggish, India Inc. is pushing for long-term solutions beyond short-term fixes.

Key demands include a rationalization of Goods and Services Tax (GST) rates. Industry groups advocate for lower rates on essential goods and higher rates on luxury items to boost consumption without impacting government revenue. Specific requests include reducing the 18% GST on insurance, particularly health insurance, and lowering the 28% rate on cement to reduce construction costs. Lower income tax rates, potentially up to ₹25 lakh per annum as suggested by some media reports, are also sought to increase disposable income and stimulate consumer spending.

To bolster domestic manufacturing, India Inc. is lobbying for increased capital expenditure. The Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) are recommending significant increases (25% and 15% respectively) to the current ₹11.11 lakh crore allocation. Further recommendations include expanding the Production-Linked Incentive (PLI) scheme to include sectors like ready-made garments, medicinal plants, and handicrafts, and expediting trade agreements with the EU and UK.

Support for Small and Medium Enterprises (SMEs) is also crucial. Experts are urging measures to enhance access to affordable credit, potentially through additional funding similar to the COVID-19 relief measures, and investment in MSME-focused universities to address skills gaps.

Overall, India Inc. hopes the budget will prioritize measures that boost consumption, stimulate manufacturing, and improve India’s ease of doing business, attracting greater investment.

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