Rama Krishna Sangem
Apart from boosting manufacturing and exports from new emerging sectors like electronics and pharmaceuticals, India should also promote its core traditional industries like leather goods and textiles, which provide more jobs. This is the view of Deloitte, days before Union Finance Minister Nirmala Sitharaman is going present her budget to the parliament on February 1, Saturday.
The government in its coming Budget must extend fiscal benefits under the PLI (production linked incentive) scheme to sectors such as handicrafts and leather that can create more jobs, Deloitte said on January 26, Sunday. It also suggested that the existing PLI schemes must continue in sectors that have seen success, such as electronics, auto and semiconductors.
Deloitte is a leading global accounting company that also provides financial services to governments and corporate world. It is one of the four major international consultancies along with EY, KPMG and PWC.
The government in 2021 announced PLI schemes for 14 sectors, including telecommunications, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell battery, drones, and pharma, with an outlay of Rs 1.97 lakh crore.
Deloitte further suggested that to improve global liquidity (once the Western central banks start easing their monetary policies), the government can raise the ceiling for investment size and remove location restrictions to attract more foreign investment.
“Multi-brand retail and e-commerce are some sectors that may benefit from this,” Rumki Majumdar, Economist, Deloitte India, said.
Biggest challenge is to boost exports
Besides, she said that one of the biggest challenges will be to revive merchandise exports that have contracted by 3 per cent in FY24. To achieve the US$ 1-trillion target by 2030, the government will have to create a roadmap.
“We expect the government to soon complete the FTA (free trade agreement) talks with Oman, Peru, the UK, the European Union, Chile, the South African Customs Union and the Gulf Cooperation Council,” Majumdar said, adding that this could boost India’s exports in these regions amid global uncertainties.
Finance Minister Nirmala Sitharaman will present the annual Budget for FY26 in the Parliament on February 1.
