Budget likely to extend tax concession for setting up manufacturing units: Report

A newly constituted working group under Meity is tasked with refining the policy framework to address challenges in electronics manufacturing.

The government is likely to revive the concessional corporate tax rate of 15 percent for new manufacturing facilities when it presents the full budget for FY25 in July, Mint has reported.

Launched in 2019, the scheme lapsed after the extended deadline ran out on March 31, 2024. Designed to attract fresh investments in manufacturing, the scheme is crucial for economic growth and job creation, the report said.

The move comes amid efforts to shift focus from low-paid agricultural activities to high-paying manufacturing jobs, seen as pivotal for economic resilience and global competitiveness.

The manufacturing sector, which contributes 14 percent to India’s GDP, rebounded with a 9.9 percent growth in FY24 after a contraction the previous year.

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The ministry of electronics and information technology (Meity) is planning an overhaul of the National Policy on Electronics, 2019 (NPE 2019) to rejuvenate manufacturing and boost exports, the Business Standard reported.

The policy targets a turnover of $400 billion for the electronics sector by 2025, aligning with broader economic goals of enhancing domestic production and integrating into global supply chains, the report added.

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Moneycontrol couldn’t verify the two reports independently.

A newly constituted working group under the ministry has been tasked with refining the policy framework to address challenges in electronics manufacturing.

It will recommend strategic tariff structures, incentives, and procedural reforms to spur productivity, employment, and domestic value addition across various sub-sectors including IT hardware, consumer electronics, automotive electronics, and more, the report said.

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With these initiatives, the government seeks to capitalise on increased public spending on infrastructure, promote innovation and strengthen India’s position in global markets.