CII moots GST rate rationalisation and joint skills fund

New Delhi: Industry body CII Thursday pitched for rationalisation of goods and service tax (GST) rates, reduction in tax litigation, establishment of a joint skills acceleration fund (between public, private and CSR), and introduction of a capital support scheme for small and medium enterprises.

New CII President Rajiv Memani said the Indian economy was expected to grow by 6.4-6.7% in FY26, driven by strong domestic demand amid global uncertainties.

"We must remember that in all these cases we don't have 100% winners," said Memani, referring to the India-US trade negotiation to seal a bilateral deal before July 9. "The Free Trade Agreement (FTA) between India and US will be done in tranches, with tricky areas, which have greater political ramifications and require more consultations, to be dealt with later," he added.


"I feel very confident that the government understands the challenges facing Indian industry and they will be adequately addressed. We are hopeful of the way the current government has prepared, and it gives a lot of comfort," he said.

Growth Blueprint
India's growth in FY26 will be driven by strong domestic demand, even as geopolitical uncertainty poses downside risks, said Memani. "India appears as a steady hand in a fractured global economic model, with strong growth numbers and macroeconomic parameters holding up well."

India's gross domestic product (GDP) grew 6.5% in FY25.

"There are obviously some risks. A lot of those risks are external risk, geopolitical risks, global trade risk, but I think a lot of them have been factored in, and there are some upsides, so hopefully they should get balanced out," said Memani.

With 'accelerating competitiveness' as its theme for 2025-26, CII identified six key areas to drive India's growth - next-generation reforms, manufacturing, technology & AI, sustainability & energy transition, livelihoods and trust.

It recommends rationalising the goods and service tax (GST) structure from five slabs to three, with 5% for essential items, 28% for luxury and sin goods, and a uniform 12-18% for all others. CII also suggests adoption of a three-tier import tariff structure, with customs duty on raw materials and inputs at 0-2.5%, intermediate goods at 2.5-5%, and final goods at 5-7%.

Further, it advocates the creation of state fiscal councils to evaluate state budgets and fiscal risks, improved dispute resolution & decriminalisation measures, as well as tax reforms.