The Union Budget 2024 has unequivocally positioned manufacturing as a cornerstone for India's transformation into a developed nation. With a clear vision to harness the sector's potential for job creation and economic growth, the government has unveiled a comprehensive package of incentives and policy reforms.
Central to this strategy is a substantial investment in industrial infrastructure. The development of investment-ready industrial parks and the expansion of the National Industrial Corridor Development Programme are pivotal steps towards creating a conducive environment for manufacturing. By optimizing supply chains and reducing logistics costs, these initiatives aim to enhance India's global competitiveness.
The budget also underscores the government's unwavering commitment to the 'Make in India' initiative. Strategic adjustments to customs duties have been implemented to encourage domestic manufacturing, increase value addition, and bolster exports. Lowering import duties on critical minerals like lithium, copper, and cobalt is a strategic move to foster domestic processing and refining capabilities, which are essential for sectors such as renewable energy, defense, and electronics.
To accelerate the growth of specific sectors, the budget introduced targeted measures. The expansion of the Phased Manufacturing Programme to the healthcare sector, coupled with duty reductions on x-ray equipment, aims to boost domestic production. Similarly, the electronics manufacturing sector received a fillip with reduced customs duties on PCBA for mobile phones and chargers.
The government's focus extends to export promotion. Addition budget allocation for proposed new PLI schemes for leather and textile sectors are expected to enhance their global competitiveness. Addressing the issue of duty inversion for spandex yarn is a significant step towards supporting domestic manufacturers and exporters in the textile industry.
Further, budget places a strong emphasis on MSMEs and job creation, with the introduction of employment-linked incentives and credit guarantees. These measures are designed to bolster the MSME ecosystem, which is expected to have a ripple effect on the broader economy, particularly the manufacturing sector.
While the budget has made substantial strides in creating a favorable business environment, further refinements are essential. Streamlining the GST dispute resolution process and easing credit transfers can significantly improve the ease of doing business for manufacturers.
In conclusion, Budget 2024 has laid a strong foundation for India's manufacturing resurgence. By investing in infrastructure, rationalizing customs duties, and supporting key sectors, the government has demonstrated its resolve to transform India into a global manufacturing hub. The successful implementation of these initiatives will be crucial in creating a thriving manufacturing ecosystem, generating employment opportunities, and propelling India towards its vision of becoming a developed nation.
(Saurabh Agarwal & Divya Bhushan are Tax Partners, EY India. Rachit Suri, Senior Tax Professional , EY India also contributed to the article)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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