India Inc. is optimistic about the growth prospects of the economy and wants the Union government’s thrust on capital expenditure (Capex) to continue in the Union Budget 2025-26, according to a survey released by apex business chamber FICCI on Tuesday.
According to the survey results, about 64 per cent participants expressed optimism regarding India’s growth prospects ahead of the Union Budget.
Nearly 60 per cent of participants projected a GDP growth rate between 6.5 and 6.9 per cent for 2025-26.
Though the numbers mark a moderation from the high growth of over 8.0 per cent witnessed in 2023-24 – it is in sync with persistent headwinds on account of external factors.
Majority of respondents highlighted the need for sustaining public Capex, with 68 per cent calling for a thrust on Capex to sustain the growth momentum.
At least a 15 per cent increase in Capex allocation for FY 2025-26 is being looked forward to by members of the Indian industry.
Additionally, over half of the respondents emphasised the importance of reforms to further enhance the Ease of Doing Business.
Reforms pertaining to factors of production – particularly with respect to areas like land acquisition, labour regulations, and power supply – remain important.
As last year’s Union Budget had indicated a road map on the next generation reforms, the industry members look forward to further guidance on the same, the survey states.
“The government’s commitment to fiscal consolidation has put us in good stead and the survey participants expected the government to remain on that course,” the survey states.
About 47 per cent of the participants expect the government to meet the fiscal deficit target of 4.9 per cent for FY 2024-25 and another 24 per cent reported that the government could improve and report a lower fiscal deficit number for the current year.
Further, concern was expressed regarding the muted demand situation. A significant number of industry members have called for a review of the direct tax structure.
A relook at the slabs and the tax rates is warranted as this could leave more money in the hands of people and spur consumption demand in the economy.
Respondents also called for a strong policy push on simplifying the tax regime, incentivising the development of green technologies/renewables and EVs, and easing compliances through digitisation.
On the taxation front, providing tax certainty, addressing custom duty inversion, and rationalisation of TDS provisions were highlighted as important themes by the participants.
The participants also showed support for an amnesty scheme under customs, with 54 per cent favouring its introduction to enable swift resolution of disputes.
The sectoral focus for the upcoming Union Budget was clear, with participants identifying infrastructure, manufacturing (particularly Industry 4.0), and agriculture/rural development as critical areas for policy attention.
Nearly 40 per cent of the respondents stressed the continued need to support MSMEs, given the pivotal role of the sector in driving employment creation.
Targeted measures for MSMEs ensuring streamlined credit access, and support for adoption of new technology and sustainability measures were called for.
Export competitiveness also emerged as a priority, with respondents emphasising further improvement in the efficiency of logistics and continuation of interest equalisation schemes to enhance India’s global trade position.
The current round of the Federation of Indian Chambers of Commerce and Industry (FICCI) pre-Budget 2025-26 Survey was conducted between late December 2024 and mid-January 2025.
The survey drew responses from over 150 companies spanning across diverse sectors, offering a comprehensive insight into India Inc’s sentiments amid moderating economic growth.
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