Union Budget 2024: Industry Calls For Tax Incentive, More Funds To Fuel Manufacturing, Export, Green Tech

Interim Budget 2024: They also asked the government to explore the possibility of establishing a global shipping line through collaboration with the private sector

The startup firm World of Circular Economy (WOCE) stated that the sustainability and climate solutions industry is seeking essential support from the government

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On Thursday, members of the Indian industry, including exporters, urged the government to offer tax incentives for research and allocate additional funds for marketing activities in the upcoming Budget scheduled for February 1. This demand aims to enhance manufacturing and boost the country's outbound shipments.

They also asked the government to explore the possibility of establishing a global shipping line through collaboration with the private sector. India's outward remittance on transport services is increasing with rising exports.

"We remitted over USD 80 billion as transport service charges in 2021. As the country moves towards the goal of USD 1 trillion, this will touch USD 200 billion by 2030," the Federation of Indian Export Organisations (FIEO) said, adding that the private sector may be engaged to develop the shipping lines.

This will also reduce arm-twisting by foreign shipping lines, particularly of our MSMEs. The organisation said that to promote Research and Development (R&D) in the country, the weighted tax deduction can be increased to 200 per cent.

"Unfortunately, India's spending on R&D (less than 1 per cent of GDP) is well below that in major nations such as China (2.43 per cent of GDP), US (3.46 per cent), Korea (4.93 per cent) and Israel (5.56 per cent)," Israr Ahmed President (Officiate) and Vice President FIEO said.

He emphasised the need for a robust export marketing strategy to present Indian products and services to a global audience. To achieve this, he stressed the necessity for increased funding under the Market Access Initiative (MAI) scheme.

"For aggressive marketing, there is a need for the creation of a corpus... for the scheme," Ahmed said, adding that the government can consider announcing a scheme on a pilot basis in 50 districts with a corpus of Rs 5,000 crore.

Moreover, the startup company World of Circular Economy (WOCE) stated that the sustainability and climate solutions industry is seeking essential support from the government. There is a significant need for funds and incentives in the industry, they said.

"Companies in the sustainability sector, especially SMEs, are facing multiple challenges, including immediate financial burdens and securing necessary resources. Urgent government intervention is needed to overcome these challenges and facilitate the seamless integration of sustainable practices," said WOCE Founder and Director Anup Garg.

Garg also appealed to the government to consider offering input tax credits for using green fuel in manufacturing processes, along with providing subsidised loans to support investments in green technologies.

Furthermore, he advocated incentivising carbon-intensive factories engaging in traceability initiatives within the raw material supply chain. Garg also called for allocating funds for research and development in greener technologies, as well as direct tax incentives for companies actively promoting decarbonisation tools and digital technologies to ensure reliable carbon data.