Budget Expectations: Industry body Ficci suggests 15% rise in capex, higher healthcare allocation

As India awaits the Narendra Modi 3.0 government's first full-year Budget, due on February 1, expectations are soaring with hopes of macroeconomic reforms and income tax relief. Finance Minister Nirmala Sitharaman is set to present what could be her eighth Budget in a row, including the Interim Budget of 2024. The Federation of Indian Chambers of Commerce & Industry (FICCI), an industry body, has outlined 11 main expectations from the upcoming Union Budget. 

Here is a summary of trade body Ficci’s expectations from Budget 2025, as submitted to the Ministry of Finance:

1. Ficci expects the Centre to maintain its thrust on investments: The industry body has proposed a 15 per cent year-on-year increase in the government’s capex in the financial year 2025-26 (FY26). In the last Budget, the government earmarked a record capital outlay of Rs 11.11 lakh crore.
2. The industry body has sought the creation of more interstate institutional platforms along the lines of the GST Council, especially aimed at reforms in areas like land, labour and power.
3. Further simplification of tax regime: The industry body has suggested rationalizing multiple tax deducted at source (TDS) or tax collected at source (TCS) rates by converging them into a simple two- or three-tier rate structure that will avoid classification disputes and prevent blockage of working capital in the industry. It has also suggested doing away with the practice of imposing TDS or TCS on the transactions subject to GST since the relevant information is already available through GST filings.
4. An independent dispute resolution forum for effective and time bound resolution: In order to reduce litigation on direct tax-related matters, Ficci has suggested introducing a new forum comprising independent experts like retired Supreme Court or High Court judges, retired presidents or vice presidents of tribunals, or professionals like lawyers or CAs with a stipulated minimum experience to deal with disputes at the assessment or post-assessment level.
5. The industry body has highlighted the need for an enabling policy framework that can target resources towards both green areas as well as transition areas. 
6. Ficci has suggested that the government provides a specific tax exemption on day care expenses in order to support women’s participation in the economy. The government may consider a special tax exemption up to a defined limit for working women for expenses incurred on childcare for children up to five years old, according to the industry body.
7. Self-reliance in defence: The trade body has suggested allowing only the defence equipment made in India or made in partnership with India to be procured in the country. It has suggested that steps be taken in order to boost the research efforts to develop technologies to keep Indian armed forces ahead in areas such as robotics, quantum computing, sensors, hypersonics, directed energy, and AI and ML. It has also suggested the establishment of a defence export promotion agency that can coordinate with armed services, their foreign directorates, DPSUs, private manufacturers, the MEA, Indian embassies, and the MoD, and communicate with foreign government and buyers. 
8. Farm prosperity: The industry body has suggested the establishment of an agricultural yields mission for bottom 100 districts on the lines of aspirational districts programme. Besides, a national programme should be launched to develop 3 million farm technicians in five years to provide new technologies and services to farmers, according to Ficci. 
9. Steps to encourage domestic PCBA manufacturing: The industry body has suggested that the government may consider a 25 per cent differential on custom duty on Printed Circuit Board Assemblies (PCBAs) vis-a-vis the final product. For instance, if the custom duty on finished electronic product is 20 per cent, then the PCBA for this finished product could be at custom duty of 15 per cent, according to Ficci.
10. Primary Education: The industry body has suggested the rollout of a Prime Minister-led national-level information, education and communication (IEC) campaign to increase national consciousness on foundational literacy numeracy (FLN) to promote early-year education in the country. 
11. Additional thrust to healthcare: Ficci has suggested an increase in the healthcare allocation from 2.1 per cent to 2.5 per cent of GDP, a move that the industry body believes can help in strengthening healthcare infrastructure, ensuring equitable access, and moving closer to Universal Health Coverage (UHC) goals. The industry body has also proposed doubling the deduction for health insurance premiums under Section 80D of the Income Tax Act to Rs 50,000.