Published 12:24 IST, January 31st 2025
Budget 2025-26: Rationalize Direct Taxes, Promote MSMEs And Manufacturing Says 'PHD Chamber'
With these recommendations, PHDCCI aims to create a business-friendly environment, support MSMEs, and position India as a global economic powerhouse.

As India gears up for the Union Budget 2025-26, industry leaders have put forward crucial recommendations to drive economic growth, improve ease of doing business, and strengthen key sectors. The PHD Chamber of Commerce and Industry (PHDCCI) has outlined several reforms that could shape the country’s economic trajectory.
According to Hemant Jain, President, PHDCCI, the upcoming budget is expected to exceed ₹51 lakh crore, with capital expenditure surpassing ₹13 lakh crore. A strong push in capital spending is seen as essential to sustaining economic momentum and boosting infrastructure development.
Tax Reforms for Individuals and Businesses
PHDCCI has proposed reducing tax rates for individuals and Limited Liability Partnerships (LLPs) to 25%, bringing them in line with corporate tax rates. This move could provide relief to taxpayers and encourage small businesses to formalize and expand.
Faceless Appeals and MSME Support
To make dispute resolution smoother, the industry body has recommended fast-tracking faceless appeals by setting statutory timelines while allowing physical hearings in exceptional cases.
For MSMEs, PHDCCI suggests reforming the classification system and extending the NPA classification limit from 90 days to 180 days. This change would provide businesses with greater flexibility in managing financial stress.
Expanding the PLI Scheme
The Production-Linked Incentive (PLI) scheme, which currently covers 14 sectors, should be extended to new areas such as medicinal plants, handicrafts, and the space sector. This would help boost domestic manufacturing and create new growth opportunities.
Boosting India’s Manufacturing Share
To achieve the goal of increasing India’s manufacturing GDP share from 16% to 25% by 2030, PHDCCI recommends reducing costs related to capital, power, logistics, land, and compliance. Lowering these barriers would enhance India's global competitiveness.
Enhancing MSME Exports and Free Trade Agreements
The industry body also advocates for MSME service exporters to be included under the Interest Equalization Scheme and for MSE Facilitation Councils to cover medium enterprises. Additionally, streamlining Free Trade Agreements (FTAs) and reinforcing the "Make in India" initiative are key steps to strengthening India’s trade and manufacturing sectors.
With these recommendations, PHDCCI aims to create a business-friendly environment, support MSMEs, and position India as a global economic powerhouse. The upcoming budget will be crucial in determining how these proposals take shape in government policies.
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Updated 15:20 IST, January 31st 2025