Industry body Assocham has recommended the extension of the production-linked incentive (PLI) schemes to more sectors in the upcoming union budget.
Sumant Singh, President of Assocham, said in a statement to the media on Thursday that the government may consider increasing funding for some of the existing PLI schemes, including the one for solar modules, given that manufacturers in some sectors have requested more incentives than has been allotted. Additionally, he suggested reallocating monies from programs with lower takers to ones with higher demand.
“Given the way the PLI schemes are set up, there are undoubtedly more applicants than funds available, not in all industries, but undoubtedly in someone. As a result, one of the things is that the government reallocates funds between PLI areas when, in one PLI scheme, the full funds were not distributed because there wasn’t enough demand, so they can be allocated to other PLIs.
Speaking about the solar module incentive program, Sinha stated that even if the Center has introduced the second PLI tranche for solar modules, the demand would be much higher than the allotted sum.
The second phase of the PLI program, totaling $19,500 crore, was approved by the union cabinet in September for local production of solar photovoltaic (PV) modules.
Among other pre-budget recommendations, the industry body said the government should increase the exemption limit for income tax to at least ₹5 lakh so that more disposable income is left in the hands of consumers and the economy gets a consumption boost and further leg-up in the recovery. Without accounting for rebates, the present exemption limit is ₹2.5 lakh for the assessees.
Sinha said buoyancy in both the direct and indirect taxes should give enough elbow room to the government for raising the income tax exemption limit.
“The government must respond to the proactive steps other nations are doing to support the production of green hydrogen as India strives to become a major energy producer. Attention should be given to sustainable and green industries to promote job growth and a green economy. Economy security is bigger than manufacturing security,” he said.
Advancing the green economy, achieving energy independence, making investments in green industries, and reducing the use of fossil fuels are all steps toward self-sufficiency.
“Boosting consumption by leaving more money in the hands of the consumers, is a low-hanging fruit for a further recovery in economic growth, ” said Deepak Sood, Secretary General, Assocham.
The chamber also noted that along with consumption, the other path to sustainable growth would be further promoting investment. In this direction, Assocham has suggested the 15% corporate tax rate for new investments in manufacturing can be extended to all sectors, including services.
Suggesting another relief measure, it said the interest for late payment of the GST should be reduced to 12% from 18%.