Budget 2025: Industry bodies call for income tax cuts, fuel duty reduction in pre-Budget meet

Representatives from various industry bodies requested a reduction in personal income tax rates to increase disposable income for the middle class, a cut in excise duty on fuel, and measures to boost employment-intensive sectors during their usual pre-Budget meeting with the Finance Minister on Monday.

The industry groups also highlighted concerns over the global dumping of excess stock by China, including in India, and the challenges posed to food security and inflation due to the "climate emergency" at the fifth pre-Budget consultation meeting.

The Union Budget for 2025-26 is scheduled for presentation on February 1.

The meeting was attended by the Finance Minister, the Finance Secretary, the Secretary of the Department of Investment and Public Asset Management (DIPAM), the Secretaries of the Department of Economic Affairs, the Chief Economic Adviser to the Government of India, and others.

After the meeting, CII President Sanjiv Puri spoke to the media, noting that while the Indian economy is performing well, there are significant global challenges. "We are witnessing a large influx of dumped products from China into various markets, including India. Additionally, the climate emergency is impacting food security, nutrition, and inflation. In this context, we have made several suggestions and proposals," he said.

Puri explained that the CII has recommended measures to promote sectors with substantial employment potential, such as garments, footwear, tourism, and furniture. They also proposed initiatives to support MSMEs and integrate India into global value chains.

Regarding consumption, Puri suggested providing relief on income tax up to Rs 20 lakh to increase disposable income, which would help boost consumption and, in turn, enhance revenue growth. "We have also recommended a reduction in excise duty on petroleum, which would raise disposable income and contribute to a positive economic cycle for consumers," he added.

FICCI Vice President Vijay Sankar, who also participated in the meeting, said, "The Finance Minister and her team listened attentively to the industry’s concerns. Representatives from around 13 industry chambers attended, and there were common themes, particularly the temporary slowdown caused by the dumping of products, especially by countries like China, due to their economic downturn."

PHDCCI President Hemant Jain noted, "We suggested reducing personal income tax to increase people's purchasing power, which could stimulate demand and help reduce inflation. We also advocated for simplification of the GST system."

Assocham President Sanjay Nayar emphasized the needs of MSMEs, calling them the backbone of the supply chain. He pointed out the challenges they face with credit flow, complicated registrations, and multiple TDS issues, and advocated for simplifying procedures and rationalizing TDS processes.