Vikrant Shekhawat : Jan 20, 2025, 06:00 AM
Union Budget 2025: Industry is having high expectations from the 2025-26 budget, especially to support local manufacturing. There is a growing demand for a cut in customs duty on raw materials used in medical components, electronic equipment, and footwear industries. Experts believe that these reforms will not only boost the economy but will also create new employment opportunities.Priorities and demandsHarpreet Singh, an indirect tax expert at Deloitte India, says that the upcoming budget is likely to focus mainly on customs reforms. Key demands include:Rationalizing customs duty rates.Simplifying the system.Improving litigation and dispute management.Singh has expressed hope that duties on raw materials in industries such as electronics, home appliances, health service products, and pharmaceuticals can be cut on the lines of the phase-wise manufacturing scheme.Manufacturing will get a boostIn the last budget, the government had announced a comprehensive review of the customs structure to ease business. This time too, the industry is confident that the government will take steps like reducing import duty and correcting the inverted duty structure.According to experts, if the input cost is reduced in the budget, it will:Boost domestic manufacturing - the competitiveness of industries will increase.Employment will increase - especially for skilled and unskilled labor.Economic growth will accelerate - exports are likely to increase.Possibility of bringing different slabsAccording to Anurag Sehgal of Price Waterhouse & Co. LLP, the government can apply different customs duty slabs for different products. This classification can be done on the basis of raw materials, intermediate products, and value-added goods.Additionally, Manoj Mishra of Grant Thornton says that about Rs 50,000 crore is stuck in customs disputes. If the government brings an amnesty scheme, it will help in resolving these disputes.Need to correct the inverted duty structureShivkumar Ramji of Nangia Andersen LLP said that there is a need to correct the inverted duty structure. This structure is formed when there is more duty on raw material and less on the finished product. This harms domestic manufacturing.ConclusionIn the upcoming budget, the government is expected to cut custom duty and simplify the customs structure to support local manufacturing. These reforms will not only reduce the cost of industries, but will also play an important role in the country's economic growth and employment generation.