Budget 2026 Should Extend PLI Scheme To New Tech Sectors With Tax Certainty, Says EY India
EY India suggested adopting a forward-thinking approach that reinforces investor confidence and catalyses private sector participation.
The existing Production-Linked Incentive (PLI) scheme should be extended to cover new technology sectors such as AI, space, and robotics, and the FY27 Budget should prioritise growth continuity and tax certainty by bringing a scheme for Customs dispute resolution, EY India said on Thursday.
EY India suggested adopting a forward-thinking approach that reinforces investor confidence and catalyses private sector participation.
EY India, National Tax Leader, Sameer Gupta, said, to stimulate private investments, the existing PLI scheme may be extended to cover new technology sectors such as AI, space, and robotics.
'Additionally, public infrastructure investments in futuristic areas, including AI, GenAI, robotics, and space technology, may induce growth of private investment in these sectors. Targeted incentives for the emerging industries will be crucial in driving innovation and attracting both domestic and foreign investors,' Gupta said.
On the tax front, businesses look for a strong commitment to tax certainty and streamlined compliance processes, he said.
On the indirect taxation side, EY suggested a one-time settlement scheme under the Customs Law to facilitate the resolution of pending disputes. This initiative would follow the successful 'Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019', which helped monetise revenue blocked in litigation.
With regard to the simplification of the customs tariff structure, EY suggested that the current tariff framework should be simplified to reduce the compliance burden on importers. This includes sector-wise customs duty rationalisation and aligning tariff rates with global standards, ensuring Indian goods remain competitive in international markets.
On the implementation of the new Income Tax Act 2025 from April 1, EY suggested that detailed guidelines and FAQs should be provided to minimise the confusion during the transition from the Income Tax Act 1961 to the new Act.
'This is crucial to avoid litigation and ensure a smooth transition for taxpayers. Certainty and predictability: Establishing a stable tax environment by minimising frequent changes in tax rates is essential. A predictable tax policy builds trust and improves compliance, which is vital for enhancing revenue collection,' EY said.
