Amidst the current Omicron wave across the world, leading world economies, including India, are on the path of recovery from the damage the COVID-19 pandemic has done. With the predicted growth of real GDP estimated at 8.3 per cent, as forecasted by the World Bank, the Indian economy is at the centre of the limelight in world economics.
In this article on expectations from the Union Budget 2022, we have highlighted industry-wise expectations for reforms, subsidies, and support mechanisms from the Government of India.
The hospitality sector is amongst the sectors that have been most disrupted from the COVID-19 pandemic and pursuant lockdown and travel restrictions that were imposed across the country.
This sector has been significantly suffered a crunch on liquidity and hence we expect the following reforms, support and benefits to accrue from the union budget 2022:
The textile sector has relatively been relaxed post the deferred increase of GST rates. However, the entities are stressed due to rapid increase in the cost of inputs such as:
Cotton prices have swiftly gone high due to the high level of exports.
Pursuant to the double-digit increase in the cost of fuel. The increase in logistics cost has squeezed the markup margins of manufacturers as well as traders.
The Industry wants the Government to either reduce the fuel prices, or
Increase the Duty Drawback incentives available for exporters.
The services sector has been an integral promoter of the increase in Gross Value Added to the Net Income. Wherein growth in basic gross value added by financial services, etc. alone is at 4 per cent as per the First Advance Estimate of National Income for 2021-22.
Therefore, to promote rapid growth of the sector the Bombay Chamber of Commerce and Industry (BCCI) has recommended that the concessional rate of tax at 15% available to manufacturers also be extended to the service sector.
Also, the industry expects:
Micro, Small and Medium Enterprises (MSME) contribute 45% of India’s Total Industrial Employment, 50% of India’s Total Exports, and 95% of all industrial units of the country that cumulatively produce more than 6000 types of products (As declared by msme.gov.in)
Therefore, it is very important that the Government of India keeps on adding benefits and increasing their expenditure on the promotion of MSMEs across all sectors in India.
To make India self-reliant and re-gain the fame of the #GoldenBird it is important that the MSME sector be made so strong that they eventually contribute the majority part to India’s GDP.
The benefits, support, reforms and measures expected by the MSMEs are:
A. Reduced interest rate to compete with the international manufacturers.
B. Development of a Central body that can educate the youth with skills, promote vocational and skill-based institutes and foster the intra-state employability opportunities so that a country rich in human resources like India can actually be benefitted from the domestic talent in an optimum manner.