India's Economic Ascendancy

India is on a fast track to becoming the world's fourth-largest economy by 2026, surpassing Japan, according to the PHD Chamber of Commerce and Industry (PHDCCI). This projection is based on the nation's resilient economic growth over the past three years, with an expected GDP growth of 6.8% in the current financial year and 7.7% in FY26.

Tax Reforms and Economic Stimulus

Ahead of the budget, PHDCCI has proposed significant tax reforms to boost consumption. The industry body suggests that the peak rate of income tax should only apply to individuals earning above Rs 40 lakh, up from the current threshold of Rs 15 lakh. Additionally, they recommend increasing the income tax exemption limit to Rs 10 lakh, aiming to enhance disposable income and stimulate economic activity.

Monetary Policy Expectations

PHDCCI anticipates a 25 basis points reduction in the benchmark interest rate by the Reserve Bank in its upcoming policy review. This expectation is rooted in the forecasted significant reduction in Consumer Price Index (CPI) inflation, despite some lingering high food prices due to environmental factors.

Strategic Growth Sectors

Looking forward, PHDCCI emphasizes the importance of focusing on key sectors for sustainable development, including agriculture and food processing, fintech, semiconductors, renewable energy, health, and insurance. The chamber advocates for a comprehensive strategy to enhance business efficiency, reduce the cost of doing business, and integrate more deeply into global value chains to sustain India's growth trajectory.