Budget 2025-26: Industry Calls For Tax Reforms, R&D Boost, And Support For Domestic Growth

Eliminate Coal Cess To Support Power Intensive Industries

New Delhi: Industry body Assocham has pitched for the removal of coal cess stating that the move will support power-intensive industries like aluminium and maintain competitiveness of the domestic industry.

In its pre-budget memorandum 2025-26, the industry body said that “high cess on coal (Rs400 per MT)...be eliminated to support power-intensive industries.” Finance Minister Nirmala Sitha-raman is likely to present the Union Budget 2025 on February 1, 2025. The cess was introduced as Clean Energy Cess in 2010 with a levy of Rs50 per metric tonne on coal. It has been increased over the years from Rs50 per metric tonne to Rs100 per metric tonne in 2014-15, Rs200 per met-ric tonne in 2015-16, and Rs400 per metric tonne in the Union Budget 2016-17, it said.

The hike in coal cess has increased the production cost of aluminium many times, Assocham said. It fur-ther said that the steep hike in coal cess has adversely impacted the sustainability of the alumini-um industry being a highly power-intensive industry, where coal contributes to 32 per cent of the production cost of the silvery-white metal. In India, the industrial power cost is very high despite having the fifth largest coal reserves. Globally, major aluminium-producing countries are extend-ing support to bring down the power and production costs. A NITI Aayog report on ‘Need for Aluminium Policy in India’ also highlighted the challenges of high power costs for the domestic aluminium producers resulting in competitive disadvantage viz-a-viz global players.

Budget Needs To Cut Tax Rates, Focus Domestic Drivers

New Delhi: The forthcoming Budget needs to focus on domestic drivers like reducing personal income tax and allocating higher capex, to boost growth amid global economic uncertainties, EY’s chief policy advisor D K Srivastava has said.

Srivastava, a member of the Advisory Council of the 16th Finance Commission, said since urban consumption is lagging, it is necessary to rationalize the personal income taxes structure, both in terms of rates and deductions such that additional disposable incomes could be put into the hands of lower and middle income class groups.

“At this time when global economic conditions are not very suitable for the Indian economy and for the global economy as a whole, the government has to rely very heavily on domestic demand drivers,” he told media in an interview. Srivastava said FY26 Budget should earmark a 20 per cent growth in capex spending over the revised estimates for current fiscal. He projected fiscal deficit at 4.8 per cent of GDP in current fiscal, and 4.4 per cent in the next. The Budget for 2025-26 will be presented on February 1.

“We expect that the Budget will establish a meaningful balance between two opposing trade-offs between fiscal consolidation and fiscal stimulus. We expect that the government would choose for its fiscal stimulus measures both an investment route and to some extent a consumption route. An investment route is the main driver of domestic demand. So far it has succeeded, and that is the reason why in the last three years we had a reasonable growth,” Srivastava said. In the current fiscal, the Indian economy is projected to grow at 6.4 per cent and the Economic Survey in July last year had projected a GDP growth rate of 6.5-7 per cent. Srivastava said the moderation in growth that is seen in the current fiscal is mainly on account of a slowdown in government capital expenditure.

Entry Of More Players To Break Barriers, Accelerate Adoption Of EVs

New Delhi: The entry of more players in the EV segment will help in breaking barriers and accelerate adoption of electric mobility in the Indian market, according to leading automobile manufacturers. More product introductions will help in catering to diverse customer needs with competition leading to expansion of the market, they noted. The announcements by passenger vehicle market leader Maruti Suzuki India with its e VITARA and Hyundai Motor India’s Creta Electric will help change the negative narrative regarding EVs in India and a unified voice from the Indian automotive industry across players and segments will help in better transformation and acceleration towards electric adoption, top executives of different automakers said.

“The general narrative on EV (earlier) was a bit more on the negative side, with a lot of question marks. Today, with all Original Equipment Manufacturers now having a credible EV portfolio, and they’re all wanting to sell, I think the narrative on EVs will change, and the real benefits of owning an EV will be uniform now,” Mercedes-Benz India Managing Director and CEO Santosh Iyer told media.

Stating that the confusion which was there till last year “would now ideally reduce”, he said, “I think a unified voice from the Indian automotive industry across players and segments will help for a better transformation, or acceleration towards electric adoption.” Expressing similar views, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, Managing Director Shailesh Chandra said, “When all the manufacturers come in, there’s no doubt that if all the OEMs are going for electric vehicle.

Budget Must Eliminate Raid Raj And Tax Terrorism: Cong

New Delhi: The Congress claimed Sunday the Modi government’s “retrograde policies” have broken the confidence of investors in India and converted “ease of doing business to unease in doing business”.

The upcoming budget must eliminate “raid raj and tax terrorism” to fix this, the opposition party said. It also called on the government to take action to protect Indian manufacturing jobs and take decisive action to shore up wages and purchasing power.

Congress General Secretary (In-charge, Communications) Jairam Ramesh said the Modi government has long proclaimed its desire to improve the “ease of doing business” in India but yet in the past decade “we have only seen an easing of private investment which has fallen to record lows and the easing out of businesspersons who have departed India in large numbers for foreign shores”.

“A byzantine, punitive, and arbitrary tax regime covering both GST and income tax - which amounts to sheer Tax Terrorism - is now the greatest threat to India’s prosperity and has contributed to an ‘unease of doing business’,” he said in a statement.

R&D With PLI To Make India Global Innovation Hub

New Delhi: The Budget 2025-26 should announce a PLI scheme for R&D to attract foreign companies and make India a global hub for innovation, said Deloitte India Partner (Direct Tax) Rohinton Sidhwa. He said the government has been pursuing a policy wherein tax holidays are less and more focus is on Production Linked Incentive (PLI) or other schemes which promote investment and employment.

“We need to push India as the R&D lab of the world and if there can be such a policy which stimulates that, like PLI for R&D which includes foreign companies, that could be a game changer,” Sidhwa told PTI in an interview. The Budget for 2025-26 will be presented in Parliament on February 1. Sidhwa said that one area which the government needs to look at is how to stimulate innovation and reward R&D spending and that would happen only when the country is able to attract global R&D centres into India.

“If we can develop our own R&D, we are less reliant on developed world for technology and that is also import substitution. Something around innovation and R&D is definitely called for and I’m hoping that the government will look at rolling out a PLI for R&D,” he said.