PHDCCI Submits Pre-Budget Memorandum To FinMin Sitharaman For Economic Resilience

In anticipation of the fiscal year 2024-25 Union Budget, the PHD Chamber of Commerce and Industry (PHDCCI) has submitted an economic memorandum to Union Finance Minister Nirmala Sitharaman. Drawing insights from surveys, analyses, and inputs from PHDCCI members nationwide, the memorandum addresses the global economic landscape characterized by geopolitical uncertainties, high interest rates, and a decelerating world economic growth rate.

To address these challenges, the PHDCCI proposes calibrated measures aimed at boosting domestic sources of growth, ensuring a sustained higher economic growth trajectory for India. Despite global economic slowdown projections due to the aftermath of the Covid 19 pandemic, conflicts in Ukraine and Gaza, and escalating living costs, the Indian economy showcases resilience. The IMF forecasts robust growth of 6.3 per cent in 2023 and 2024, with the RBI projecting a 7 per cent growth rate for 2023-24, emphasizing India's potential.

Ease Of Doing Business

The memorandum underscores India's commitment to a green economy, aligning with the 2023-24 Union Budget's emphasis on renewable energy, reduced fossil fuel reliance, and sustainability. It also advocates for more focus on tier two cities, rural areas, and expanded digital connectivity to enhance the ease of doing business, emphasizing streamlined approval processes, regional balance, and simplified sector-specific foreign direct investment (FDI) policies to encourage investments.

A key focus is reducing the overall cost of doing business, covering capital, power, logistics, land, labor, and compliance costs. This, according to the memorandum, will enhance industry and export competitiveness, reduce imports, and strengthen domestic capabilities. Acknowledging India's emergence as a global startup hub with over 100 unicorns, the memorandum calls for increased support in terms of access to the Government e-marketplace (GeM), technology, AI-based development, and a reinforced incubation framework.

Logistics And Rural Infrastructure

Recognizing the logistics sector as the backbone of India's economy, the memorandum advocates for advanced technology applications such as IoT, automation, blockchain, cloud computing, AI, and robotics to improve logistics development. The memorandum deems the development of the MSME sector, improvement of value chains, and increased access to capital critical for India's economic growth. It recommends prioritizing digital infrastructure, literacy, and skill development to propel the services sector, particularly software exports.

Emphasizing the importance of rural infrastructure, private sector participation, and waste reduction in agriculture's growth, the memorandum highlights the need for infrastructure development across sectors, suggesting an investment of at least 10 per cent of GDP. To stimulate private investments, it recommends measures like fueling consumption, optimizing capacity utilization, easing business processes at the factory level, rationalizing the cost of doing business, taxation reforms, and investing in state-of-the-art infrastructure.

Developing Human Capital

Addressing India's labor force composition, characterized by a high proportion in agriculture and the informal sector, the memorandum calls for creating a highly skilled talent base and a robust human capital ready to serve the nation. In the healthcare sector, it pleads for bridging gaps in access, investing in competent medical professionals, and improving the quality of medical education. Specialized training and preparedness for healthcare personnel are emphasized.

To generate employment, accelerated reforms in the agriculture and food processing sector, along with significant public investments in agriculture infrastructure, are recommended. Rural infrastructure logistics and cold chain reforms are deemed essential for boosting the food processing industry and rural entrepreneurship, leading to increased participation in global agriculture and food exports.

The PHDCCI's memorandum outlines a comprehensive roadmap to navigate challenges and capitalize on opportunities for sustained economic growth, urging the government to consider these recommendations in the upcoming Union Budget for 2024-25.