The Indian economy has witnessed a positive recovery in demand across most segments in the last two quarters. We are very supportive of the Government’s initiatives to grow the economy.
The Government has focused on increasing the ease of doing business and has introduced a host of excellent reforms in this regard, which has helped India to move positively ahead. To better the prospects of India becoming the Manufacturing & Innovation hub of the world, we have shared some of the areas that can be kept in perspective for strong growth and right change at a macroeconomic level.
- We are happy with the current PLI schemes that have been implemented by the government. The government spent significant resources on attracting large Manufacturers from across multiple sectors. However, we are hopeful that the government increases allocation to widen the ambit within and from the current 27 sectors to boost manufacturing and production within the country.
- We hope that in the ensuing budget a favourable tax structure is announced for R&D set-ups of all forms, including contract R&D set-ups, as their contribution to the Indian economy in the form of job creation and investments in setting up infrastructure—testing facilities and equipment, amongst others is immense. The boost to R&D will not only benefit sectors such as automobiles, capital goods, life sciences, technology, and telecommunications but will also create an environment of innovation.
- With reference to Indirect taxes, we believe that lowering indirect taxes for businesses and speeding up the deduction of expenses will assist growth.
- The introduction of GST was a much-needed tax reform for India. We are happy that the government has reduced the GST bands to four, but we believe that the budget lends itself well to further converging the existing bands of GST rates to three in a phased manner.
- In addition, the customs duty on imported reagents and chemicals is high resulting in an increase in cost, we believe that there is a need for a reduction in import duties which in some cases are as high as 33%.
