The Indian government is considering a significant boost to the "make in India" initiative by contemplating an extension of favorable corporate tax rates for new manufacturing companies. Media reports reveal that discussions are ongoing to potentially prolong the existing concession for one to two years. That means the current sunset clause, set to expire on march 31, 2024, could see an extension.

Budget 2024: Focus on domestic manufacturing

The Indian government is considering a significant boost to the manufacturing sector by extending the favorable corporate tax rates for new companies, say several media reports.

These reports reveal that discussions are underway to prolong the existing concession for one to two years. This means the current sunset clause, set to expire on March 31, 2024, could see an extension. However, a final decision has not been reached yet.

At present, newly established domestic manufacturing firms enjoy a concessional corporate tax rate of 15 per cent. To qualify for this benefit, manufacturing units must begin operations by the end of March 2024.

This clause, first announced in the 2019 Budget, aims to attract more investments and stimulate growth in the manufacturing sector.

By offering favorable tax rates to new manufacturing companies, the government aims to make india a more appealing destination for businesses looking to set up manufacturing operations.

This aligns with the broader "Make in India" initiative, which encourages domestic production and reduces reliance on imported goods.

Experts believe that the concessions need to be extended for a period of two more years to see the full extent of the initiative's potential in bringing in new investments.

Abhishek Mundada, Partner, Dhruva Advisors, tells WION that the initiative must be extended for at least five to six years, if India wants to attract global manufacturers.

"Manufacturing sector is the thrust of this government, in terms of making India a global leader," Mundada says, adding that the government introduced this provision to take India's small manufacturing sector to "the next level".

Extending the concessional corporate tax rates would provide a financial incentive for companies to establish and expand their manufacturing units in india. This, in turn, could lead to job creation, technology transfer, and an overall boost to the economy.

The concessions can boost India's ambition to become the world's third-largest economy by the next decade. Mundada argues that countries have and will become a superpower, only with a strong manufacturing base.

With multinational firms increasingly 'de-risking' their supply chains away from China, India has the opportunity to divert manufacturers away from the world's 'factory'.

"After COVID-19 pandemic, the global market dynamics have changed. Boardroom are discussing a 'China +1' strategy and India is at the forefront of it. So, this (concessional tax) regime is important," he adds.

The Indian government is considering a significant boost to the manufacturing sector by extending the favorable corporate tax rates for new companies, say several media reports.

The Indian government is considering a significant boost to the manufacturing sector by extending the favorable corporate tax rates for new companies, say several media reports. These reports reveal that discussions are underway to prolong the existing concession for one to two years. This means the current sunset clause, set to expire on March 31, 2024, could see an extension. However, a final decision has not been reached yet. At present, newly established domestic manufacturing firms enjoy a concessional corporate tax rate of 15 per cent. To qualify for this benefit, manufacturing units must begin operations by the end of March 2024. This clause, first announced in the 2019 Budget, aims to attract more investments and stimulate growth in the manufacturing sector. By offering favorable tax rates to new manufacturing companies, the government aims to make india a more appealing destination for businesses looking to set up manufacturing operations. This aligns with the broader "Make in India" initiative, which encourages domestic production and reduces reliance on imported goods. Experts believe that the concessions need to be extended for a period of two more years to see the full extent of the initiative's potential in bringing in new investments. Abhishek Mundada, Partner, Dhruva Advisors, tells WION that the initiative must be extended for at least five to six years, if India wants to attract global manufacturers. "Manufacturing sector is the thrust of this government, in terms of making India a global leader," Mundada says, adding that the government introduced this provision to take India's small manufacturing sector to "the next level". Extending the concessional corporate tax rates would provide a financial incentive for companies to establish and expand their manufacturing units in india. This, in turn, could lead to job creation, technology transfer, and an overall boost to the economy. The concessions can boost India's ambition to become the world's third-largest economy by the next decade. Mundada argues that countries have and will become a superpower, only with a strong manufacturing base. With multinational firms increasingly 'de-risking' their supply chains away from China, India has the opportunity to divert manufacturers away from the world's 'factory'. "After COVID-19 pandemic, the global market dynamics have changed. Boardroom are discussing a 'China +1' strategy and India is at the forefront of it. So, this (concessional tax) regime is important," he adds.

Budget 2024: Concessional corporate taxes to get another extension, say reports

The Indian Union Budget, an annual ritual of economic pronouncements, arrives on February 1, amidst a charged atmosphere. With national elections casting long shadows, the tightrope walk between fiscal prudence and political expediency has never been more critical. This year's budget holds the key to India's economic trajectory, impacting not just domestic prosperity but also its standing in the global investment arena.

The central theme revolves around the fiscal deficit, the ever-present gap between the government's income and expenditure. Bridging this chasm requires a deft balancing act, juggling strategic borrowing with prudent spending. Finance Minister Nirmala Sitharaman set the stage last year with a bold 5.9 per cent fiscal deficit target, a significant deviation from the previous year's trajectory. This fiscal consolidation commitment has resonated with foreign investors seeking stability and structural reforms.

However, as election fever grips the nation, whispers of populism are starting to rise. The temptation to woo voters with short-term measures, sacrificing long-term stability for immediate gratification, is undeniably strong. Will the government succumb to these pressures, potentially jeopardising India's carefully cultivated image as a reliable investment destination?

Global investors are observing with keen interest. Growth and fiscal deficit targets are their barometers for India's economic health. Any deviation from the path of fiscal consolidation could trigger tremors in financial markets, raising concerns about India's commitment to responsible macroeconomic management.

The government, however, maintains its stance on the tightrope. They assert that the fiscal deficit remains under control, highlighting their dedication to responsible economic stewardship. But can this commitment withstand the mounting pressure of elections?

As Budget Day draws closer, the question resonates: will India bridge the fiscal gap or build a chasm? Will the government prioritise long-term fiscal discipline and structural reform, or will populism take centre stage? The pages of the Union Budget hold the answer, not just for domestic economic policies but also for India's standing in the global market.

This February 1, watch closely as the Indian government attempts to traverse the delicate tightrope between political expediency and responsible fiscal management. The world is watching, and the stakes have never been higher.

The Indian Union Budget, an annual ritual of economic pronouncements, arrives on February 1, amidst a charged atmosphere. With national elections casting long shadows, the tightrope walk between fiscal prudence and political expediency has never been more critical.

The Indian Union Budget, an annual ritual of economic pronouncements, arrives on February 1, amidst a charged atmosphere. With national elections casting long shadows, the tightrope walk between fiscal prudence and political expediency has never been more critical. This year's budget holds the key to India's economic trajectory, impacting not just domestic prosperity but also its standing in the global investment arena. The central theme revolves around the fiscal deficit, the ever-present gap between the government's income and expenditure. Bridging this chasm requires a deft balancing act, juggling strategic borrowing with prudent spending. Finance Minister Nirmala Sitharaman set the stage last year with a bold 5.9 per cent fiscal deficit target, a significant deviation from the previous year's trajectory. This fiscal consolidation commitment has resonated with foreign investors seeking stability and structural reforms. However, as election fever grips the nation, whispers of populism are starting to rise. The temptation to woo voters with short-term measures, sacrificing long-term stability for immediate gratification, is undeniably strong. Will the government succumb to these pressures, potentially jeopardising India's carefully cultivated image as a reliable investment destination? Global investors are observing with keen interest. Growth and fiscal deficit targets are their barometers for India's economic health. Any deviation from the path of fiscal consolidation could trigger tremors in financial markets, raising concerns about India's commitment to responsible macroeconomic management. The government, however, maintains its stance on the tightrope. They assert that the fiscal deficit remains under control, highlighting their dedication to responsible economic stewardship. But can this commitment withstand the mounting pressure of elections? As Budget Day draws closer, the question resonates: will India bridge the fiscal gap or build a chasm? Will the government prioritise long-term fiscal discipline and structural reform, or will populism take centre stage? The pages of the Union Budget hold the answer, not just for domestic economic policies but also for India's standing in the global market. This February 1, watch closely as the Indian government attempts to traverse the delicate tightrope between political expediency and responsible fiscal management. The world is watching, and the stakes have never been higher.

India's fiscal tightrope walk: Will Budget 2024 bridge the gap or develop a rift?

&nbsp;

Every October, amidst the hallowed halls of Parliament, a meticulous ballet unfolds. One that includes numbers and calculations, conducted by the Finance Minister and a symphony of advisors, ministries, and economic minds. This is the crafting of the Indian Union Budget, a delicate dance between aspirations and resources, woven into a financial roadmap for the nation.

The opening act commences with a grand gathering of voices. Industry leaders and economists offer their measured melodies, depicting the economic landscape. Ministries, like seasoned orchestral sections, present their financial proposals, requesting allocation of resources with careful precision. Meanwhile, the Chief Economic Advisor and financial advisors act as the meticulous conductors, harmonising expenditures and crafting the initial fiscal composition.

Act II sees the emergence of the deficit, the crucial gap between aspirations and realities. The government, in collaboration with the Reserve Bank of India, analyses revenue streams and assesses borrowing options, both external and domestic. It's a delicate balancing act, ensuring the financial bridge is solid without overburdening the nation.

Act III witnesses the meticulous fine-tuning of the fiscal score. Tax rates may be adjusted, expenditures reprioritised, and non-plan expenditures carefully evaluated, all in pursuit of the targeted deficit. It's a constant negotiation, ensuring the fiscal melody remains harmonious and sustainable.

The grand finale arrives with the presentation of the Budget in Parliament. The Finance Minister, Nirmala Sitaraman, the lead vocalist, narrates the financial narrative, detailing estimated receipts, expenditures, and proposed policies. Parliament, the discerning audience, scrutinises the composition, offering amendments and ensuring the budget aligns with national priorities.

This intricate performance culminates in the formal approval of the Appropriation Bills and the Finance Bill, authorising government spending and any proposed tax changes. However, the music may not always end there. The Vote-on-Account, a temporary financial bridge, allows for urgent expenditures until the full budget comes into effect on April 1st.

Thus, the Indian Budget is more than just a set of numbers; it's a meticulously orchestrated symphony of collaboration, responsibility, and parliamentary scrutiny. It shapes the economic narrative of the nation, paving the way for growth, development, and ultimately, the well-being of its citizens. So, the next time you hear whispers of fiscal targets or infrastructure spending, remember the grand performance behind it, the choreographed crescendo of India's Budget.

Every October, amidst the hallowed halls of Parliament, a meticulous ballet unfolds. One that includes numbers and calculations, conducted by the Finance Minister and a symphony of advisors, ministries, and economic minds.

Every October, amidst the hallowed halls of Parliament, a meticulous ballet unfolds. One that includes numbers and calculations, conducted by the Finance Minister and a symphony of advisors, ministries, and economic minds. This is the crafting of the Indian Union Budget, a delicate dance between aspirations and resources, woven into a financial roadmap for the nation. The opening act commences with a grand gathering of voices. Industry leaders and economists offer their measured melodies, depicting the economic landscape. Ministries, like seasoned orchestral sections, present their financial proposals, requesting allocation of resources with careful precision. Meanwhile, the Chief Economic Advisor and financial advisors act as the meticulous conductors, harmonising expenditures and crafting the initial fiscal composition. Act II sees the emergence of the deficit, the crucial gap between aspirations and realities. The government, in collaboration with the Reserve Bank of India, analyses revenue streams and assesses borrowing options, both external and domestic. It's a delicate balancing act, ensuring the financial bridge is solid without overburdening the nation. Act III witnesses the meticulous fine-tuning of the fiscal score. Tax rates may be adjusted, expenditures reprioritised, and non-plan expenditures carefully evaluated, all in pursuit of the targeted deficit. It's a constant negotiation, ensuring the fiscal melody remains harmonious and sustainable. The grand finale arrives with the presentation of the Budget in Parliament. The Finance Minister, Nirmala Sitaraman, the lead vocalist, narrates the financial narrative, detailing estimated receipts, expenditures, and proposed policies. Parliament, the discerning audience, scrutinises the composition, offering amendments and ensuring the budget aligns with national priorities. This intricate performance culminates in the formal approval of the Appropriation Bills and the Finance Bill, authorising government spending and any proposed tax changes. However, the music may not always end there. The Vote-on-Account, a temporary financial bridge, allows for urgent expenditures until the full budget comes into effect on April 1st. Thus, the Indian Budget is more than just a set of numbers; it's a meticulously orchestrated symphony of collaboration, responsibility, and parliamentary scrutiny. It shapes the economic narrative of the nation, paving the way for growth, development, and ultimately, the well-being of its citizens. So, the next time you hear whispers of fiscal targets or infrastructure spending, remember the grand performance behind it, the choreographed crescendo of India's Budget.

Budget 2024: Choreographing the peak of fiscal responsibility

It's 2024, and India's budget session is just a few weeks away. India is set to vote for a new government in April-May 2024. So, this year's budget holds a lot of political significance. But how will this year's budget be different from others?

Full Budget vs Vote on account: Why India's 2024 Budget will be different?

India's Budget 2024: FM Nirmala Sitharaman hints at vote on account on Feb 1

Indian Finance Minister Nirmala Sitharaman will present the Union Budget on February 1. This will be the last budget of the Modi government before the parliamentary elections, scheduled to be held in April-May this year.

Given its timing, this budget will also be different from the other budgets presented thus far under the Modi government. The February 1 budget will be a 'Vote on Account'.

According to India's Finance Ministry, Article 116 of the Indian Constitution "empowers Lok Sabha to make any grant in advance in respect of the estimated expenditure for a part of the financial year pending completion of procedure for the voting of the Demands."

Simply put: India's parliament allows the government to spend for a brief period of the next fiscal year, before the Full Budget is voted upon by the Lok Sabha - India's lower house.&nbsp;

The Consolidated Fund of India is the corpus of all the revenue that the government receives. The government of the day needs parliamentary approval to spend from this corpus.&nbsp;

Usually, the 'Vote on Account' remains in force for four months in the fiscal year. The next government presents the full budget in July, which remains in effect for the rest of the fiscal year. India's fiscal year runs from April 1 to March 31.

The 'Vote on Account' is often dubbed an 'Interim Budget'. However, this is a misnomer. While an 'Interim Budget' has both revenue and expenditure, a 'Vote on Account' only has the latter.

Union governments generally do not present a full budget ahead of polls, leaving the responsibility to the next government. The 'Vote on Account' allows the next government to design its own economic policies.

Unlike in a full budget, the government does not announce tax proposals in a 'Vote on Account'. This was the type of budget presented in the three preceding election years -- 2009, 2014 and 2019.

Pranab Mukherjee presented the 'Vote on Account' budget in 2009, while P Chidambaram presented it in 2014. The last 'Vote on Account' budget was presented by Piyush Goyal, then-acting Finance Minister.

The 'Vote on Account' is also cleared by the lower house of the Indian parliament without any discussion. This is because this budget is essential to&nbsp;the smooth functioning of the government amid the electoral process.&nbsp;

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Indian Finance Minister Nirmala Sitharaman will present the Union Budget on February 1. This will be the last budget of the Modi government before the parliamentary elections, scheduled to be held in April-May this year.

Indian Finance Minister Nirmala Sitharaman will present the Union Budget on February 1. This will be the last budget of the Modi government before the parliamentary elections, scheduled to be held in April-May this year. Given its timing, this budget will also be different from the other budgets presented thus far under the Modi government. The February 1 budget will be a 'Vote on Account'. According to India's Finance Ministry, Article 116 of the Indian Constitution "empowers Lok Sabha to make any grant in advance in respect of the estimated expenditure for a part of the financial year pending completion of procedure for the voting of the Demands." Simply put: India's parliament allows the government to spend for a brief period of the next fiscal year, before the Full Budget is voted upon by the Lok Sabha - India's lower house. The Consolidated Fund of India is the corpus of all the revenue that the government receives. The government of the day needs parliamentary approval to spend from this corpus. Usually, the 'Vote on Account' remains in force for four months in the fiscal year. The next government presents the full budget in July, which remains in effect for the rest of the fiscal year. India's fiscal year runs from April 1 to March 31. The 'Vote on Account' is often dubbed an 'Interim Budget'. However, this is a misnomer. While an 'Interim Budget' has both revenue and expenditure, a 'Vote on Account' only has the latter. Union governments generally do not present a full budget ahead of polls, leaving the responsibility to the next government. The 'Vote on Account' allows the next government to design its own economic policies. Unlike in a full budget, the government does not announce tax proposals in a 'Vote on Account'. This was the type of budget presented in the three preceding election years -- 2009, 2014 and 2019. Pranab Mukherjee presented the 'Vote on Account' budget in 2009, while P Chidambaram presented it in 2014. The last 'Vote on Account' budget was presented by Piyush Goyal, then-acting Finance Minister. The 'Vote on Account' is also cleared by the lower house of the Indian parliament without any discussion. This is because this budget is essential to the smooth functioning of the government amid the electoral process. WATCH WION LIVE HERE

Budget 2024: Decoding the 'Vote on Account' in an election year

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