Budget 2025: Chemical Industry Looks Forward to Positive Reforms
Lucknow: The chemical industry has high expectations from the upcoming Budget 2025, with a particular focus on the government’s potential initiatives to support growth, especially for companies producing natural and sustainable products in the sector. The most significant anticipation stems from the schemes introduced for the MSME sector, which includes medium, small, and micro enterprises.
Yawar Ali Shah, Co-founder and CEO of AMA Herbal, and Vice Chairman of the Indian Industries Association (IIA), emphasized that medium-scale enterprises contribute the most to exports in the chemical sector. According to recent data, 65% of the total exports from the MSME sector come from medium-scale industries. If separate schemes are introduced for all three categories, it is likely to lead to a boost in production, particularly for medium-sized businesses.
Production Linked Incentives (PLI) for Medium-Scale Industries
The government has already implemented schemes like Production Linked Incentives (PLI) for large-scale companies to boost their production. Data reveals that while large-scale companies employ three people for every crore rupees, medium-scale companies employ up to ten people for the same amount. If the government introduces similar schemes tailored for medium-scale enterprises, it will significantly aid in increasing production levels.
Facilitating Environmental Pathways
The government has been focusing heavily on environmental sustainability, and the chemical and dyeing industries are often associated with substantial environmental harm. In this context, companies involved in the production of sustainable products will benefit if the GST is reduced, incentivizing their efforts towards a more eco-friendly approach. Additionally, offering tax benefits to consumers who choose natural products will help increase demand in the market.
Currently, natural dyeing is categorized under the broader chemical industry. However, if natural dyeing is recognized as a separate industry, it is expected to receive more benefits, boosting both demand and production.
As the chemical sector anticipates the 2025 Budget, it hopes that the government will introduce policies that not only support sustainable practices but also make it easier for companies in the MSME sector, particularly those in the chemical and dyeing industries, to thrive. By promoting eco-friendly initiatives and incentivizing medium-scale industries, the government can help create a more prosperous and environmentally responsible sector.
