EY's 2024 Budget expectation report suggests that the government might prolong the favourable 15% income tax rate for corporate entities establishing new manufacturing units, extending it by a year until March 31, 2025, with the aim of promoting private investments. The interim Budget for 2024-25, scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1, is anticipated to focus on simplifying tax payment processes, while ongoing legislative reforms will be maintained.

In a bid to stimulate investment in the manufacturing sector and boost exports, EY predicts that the interim Budget may push back the deadline for commencing manufacturing from March 31, 2024, to March 31, 2025, for companies benefiting from the 15% concessional income tax rate.

In 2019, the government had announced that any new domestic company incorporated on or after October 1, 2019, investing in manufacturing could opt for a 15% income tax rate if production commenced on or before March 31, 2023. The Budget in February 2023 extended the concessional 15% corporate tax rate for new manufacturing units until March 2024. The EY report also highlights that despite subdued global growth prospects, India is projected to achieve a 7% growth in the current fiscal year, driven by resilient domestic demand. Looking ahead, India's growth is deemed critically reliant on its saving and investment rates, particularly financial savings in the household sector, which become available for public and private corporate sector investments, according to EY.