Indian Finance Minister Sitharaman holds budget meeting

India’s Finance Minister Nirmala Sitharaman will hold preliminary budget meeting with industry leaders today.

The annually held meeting receives the recommendations of key shareholders prior to the impending Union Budget, which is expected to be released during late July. As such, high-profile industry associations such as Confederation of Indian Industry, and the Federation of Indian Chambers of Commerce and Industry (FICCI) will today submit their suggestions for the new budget.

Expect the Union Budget to consist of a tax reform package, which will be put in place during the short-to medium-term as part of PM Narendra Modi’s election promise for his third consecutive term. In this framework, while indirect tax rates, such as import duties, will likely stay unchanged, the government plans on granting a relief package to small taxpayers. This will likely include measures like tax deductions. However, expect no new measures on corporate tax, which will likely upset some Indian manufacturers. This is mainly because the existing corporate tax system only allows a select group of companies to reap the benefits of a tax cut. Despite this, it is highly unlikely for India’s manufacturing sector to take a major hit.