Budget 2024 Industry Sector: Finance Minister Nirmala Sitharaman on Tuesday presented the Union Budget 2024 in the Parliament. This is FM Sitharaman’s seventh consecutive Budget and the newly formed Prime Minister Narendra Modi-led NDA government’s first after general elections this year. The finance minister announced the Budget theme for this year and said that the focus areas for the government will remain the poor, woman, youth and the farmer.
India Inc welcomed the Union Budget and said that the annual budget by the finance minister sets the stage for driving personal consumption by making agriculture incomes more robust, extending credit for the creation of formal employment opportunities, setting the economy on a long-term growth path through upskilling, boosting domestic consumption through direct tax and capital gains tweaks, and promoting tourism.
The finance minister announced twelve new industrial parks to be developed under the National Industrial Corridor Development programme. These parks, she added, will be equipped with complete infrastructure and ‘plug and play’ parks will be sanctioned in or near 100 cities.
The finance minister also announced a proposal for abolishing angel tax for all classes of investors in startups. She also announced various changes with respect to tax rates for e-commerce players and certain financial instruments in the context of long-term capital gains.
Nirmala Sitharaman also announced revised tax slabs under the new tax regime and a standard deduction of Rs 75,000 from Rs 50,000. The lowest slab in the new tax regime, she announced, is increased to Rs 3 lakh from Rs 2.5 lakh; 5 per cent tax for slab of Rs 3-7 lakh, 10 per cent tax for slab of Rs 7-10 lakh, 15 per cent tax for slab of Rs 10-12 lakh, and 20 per cent tax for slab of Rs 12-15 lakh.
The government also lowered its fiscal deficit target for FY25 to 4.9 per cent of GDP, lower than the 5.1 per cent target announced during the interim budget in February.
Hera are all the updates and even voices from across industries on the announcements in the Budget and how these will impact India Inc.
Pushan Sharma, Director-Research, CRISIL Market Intelligence & Analytics, said, “Union Budget 2024-25 proposes a simpler tax regime for foreign shipping companies operating domestic cruises in India. Between fiscals 2014 and 2023, India witnessed a significant boost in cruise tourism, with ship calls increasing from 102 to 227 and passengers swelling from 84,000 to 4.72 lakh. The government aims to achieve an annual cruise passenger traffic of 18 lakh by 2030 and have 25 operational cruise terminals by 2047. These initiatives are expected to increase tourist inflow, generate employment and showcase India’s rich cultural and natural heritage to the world.”
Rajesh Magow, Co-Founder & Group CEO, MakeMyTrip, said, “The government’s continued emphasis on infrastructure development is commendable. Enhanced road infrastructure will bolster the travel and tourism sector. We also welcome the initiatives to develop iconic spiritual and cultural sites into world class tourist hotspots. The decision to reduce the TDS rate on e-commerce operators to 0.1% is a welcome move. Furthermore, the provision of credit for TCS against income tax under ‘Income from Salaries’ is logical and will provide much desired relief to taxpayers who travel internationally.”
Shammi Agarwal, Director, Pansari Group, said, “Being in the industry for so long, we can firmly say that this year’s Union Budget reflects a commendable commitment towards strengthening India‘s agricultural sector, supporting MSMEs and traditional artisans. The provision of Rs 1.52 lakh crore for agricultural and related industries is a monumental step that will undoubtedly drive growth and innovation in this crucial sector. Furthermore, the Union Budget’s initiative to establish e-commerce export hubs through public-private partnerships is a visionary move. Lastly, the allocation of Rs 1.48 lakh crore for education, employment, and skilling highlights the government’s dedication to building a skilled workforce ready to meet the demands of a rapidly evolving economy.”
Animesh Kumar, Head of Commercials at ibis & ibis Styles India, said, “It is highly encouraging to see that the Hon’ble Finance Minister has underscored the vital role of tourism in driving our economy and boosting employment and GDP. The enhanced focus on developing tourism corridors at Vishnupad Temple and Mahabodhi Temple, modeled after the successful Kashi Vishwanath Temple initiative, will significantly contribute to tourism growth during the Amrit Kal. Additionally, the government’s support for transforming Nalanda in Bihar into a major tourist destination is a noteworthy step forward.
However, to fully harness the potential of the hospitality sector and further enhance tourism, it was crucial for the government to consider more lenient tax policies and allocate a substantial budget to elevate hotel standards. We are optimistic that future support from the Government will include granting infrastructure status to the hospitality and tourism sectors, which will help us achieve long-awaited progress and drive sustained growth.”
Shripal Shah, MD & CEO, Kotak Securities, said, “This Union Budget sets a clear vision for India‘s economic future, prioritizing both growth and fiscal responsibility. The increase in the tax rate on long-term capital gains and short-term capital gains on equity, along with the increase in STT on futures and options, are aimed at moderating currently heightened activity levels and fostering a more sustainable pace of growth in the stock market. Overall, this budget instils confidence in India’s growth trajectory and lays a strong foundation for the future. We remain optimistic about the long-term prospects for the Indian economy and capital markets.”
Angshu Mallick, MD & CEO, Adani Wilmar, said, “I see great potential in the Rs 1.52 lakh crore allocation in the 2024 Union Budget for revolutionizing India‘s agriculture sector. This strategic investment will significantly enhance productivity, resilience, and sustainability.”
He further said that the focus on rural development, self-sufficiency in crucial crops, vegetable clusters, and improved digital infrastructure is particularly encouraging. “These measures promise to optimize the agricultural value chain, boosting efficiency and competitiveness. The Digital Public Infrastructure (DPI) initiative, starting with a digital crop survey for Kharif in 400 districts, will stabilize rural economies and ensure 6 crore farmers and their lands are registered, facilitating the issuance of Jan Samarth-based Kisan Credit Cards,” he added
Yezdi Nagporewalla, CEO, KPMG in India, said, “Government of India as a first major move in its third term has taken a balanced view in Budget 2024 to chart the course for transforming India into ‘Viksit Bharat’ by 2047. Sustained efforts continuing on nine priority areas including energy security, infrastructure, innovation, and R&D amongst others will certainly provide the necessary fillip to the economy.
The Budget saw a special focus on creating ‘employment’ and ‘Ease of Doing Business’ in India with announcements including comprehensive review of income tax act, announcement of amnesty scheme under income tax, limited reopening of reassessments and providing incentives to employers for job creation.
With a prudent growth forecast of 6.5-7 percent for the current fiscal continues to uphold the India growth story and efforts to promote foreign investments dovetail well with reduced rate of corporate tax for foreign companies, rationalisation of customs duty rates, simplification of FDI and overseas investment route, etc.”
After the presentation of the Union Budget, Prime Minister Narendra Modi said, “This budget is for the empowerment of the new middle class. The youth will get unlimited opportunities from this budget. This budget will help women, small businessmen, MSMEs.”
Rikant Pittie, Co-Founder EaseMyTrip, said, “The government’s attempt in positioning India as the global tourist destination is evident in the Union Budget 2024-25. Demonstrating efforts to promote religious tourism and domestic tourism infrastructure. With special focus on Bihar, Nalanda, and Odisha, the government plans to develop the iconic religious sites to support its infrastructure and transform them into world class pilgrim and tourist destinations. We are optimistic that this will enhance the overall experience of the tourists visiting these religious sites and will uplift the state tourism.”
Ashish Singhal, Co-founder, Lemonn and CoinSwitch, said, “We welcome the Union Budget 2024-25 as a pro-development budget bringing great news for startups. As a founder and angel investor, I’m thrilled that the Angel Tax has been abolished. This will significantly bolster the entrepreneurial ecosystem in India. The emphasis on digital public infrastructure and the digitalization of the economy will greatly benefit tech startups like ours, which are focused on developing population-scale apps for Indians. However, the securities markets face challenges with the increase in short-term capital gains tax from 15% to 20%, the rise in long-term capital gains tax from 10% to 12.5%, and the hike in STT on F&O. The immediate market reaction has been less than positive.”
Biraja Rout, Founder, Biggies Burger, said, “The Union Budget 2024 presents a promising landscape for the Indian QSR industry. The enhanced Mudra loan limit is a significant step towards empowering aspiring entrepreneurs, especially in Tier II and III cities. This will encourage more young individuals to explore opportunities in the food service sector, including franchising. Moreover, the proposed abolishment of angel tax is a game-changer for startups in the QSR space. This move will foster a more conducive investment climate, encouraging domestic and foreign investors to support the growth of the Indian QSR industry. The government’s focus on urban development is also a positive development for the food industry. Increased infrastructure spending and urban planning initiatives will create a favorable environment for the expansion of QSR chains, leading to better accessibility and convenience for consumers.”
Aditi Nayar, Chief Economist, Head of Research and Outreach at ICRA Ltd, said, “The Union Budget kept the capital expenditure unchanged and pared the fiscal deficit to 4.9% of GDP in line with ICRA’s estimates, although the cut in borrowings is smaller than what we had expected. The anticipated reiteration of the reduction in the fiscal deficit to below 4.5% of GDP in FY2026, is welcome. Interestingly, the new medium term fiscal consolidation path has been linked to a reduction in the debt/GDP ratio instead of continued compression of the fiscal deficit/GDP ratio. This will allow the Government flexibility to chart an appropriate fiscal course that builds in higher capital spending as well as support to meeting the climate goals, in a fairly uncertain global environment.”
“This budget has achieved the trinity of impossible – Fiscal Prudence, Investment and Growth momentum. Fiscal Prudence of 4.9 % for FY 24 will pave the way for rating upgrade. Support for employment generation will boost growth. Infrastructure investment at 3.4 % of GDP is elevated yet not crowding out others.”
– Nilesh Shah, Managing Director, Kotak Mahindra AMC
Manish Aggarwal, Director, Bikano, Bikanervala Foods Pvt Ltd, said, “I am heartened by the Union Budget 2024‘s comprehensive approach towards agriculture and rural development. The allocation of INR 1.52 lakh crore for agriculture and allied sectors, alongside the release of 109 high-yielding and climate-resilient crop varieties, marks a significant advancement. This initiative will undoubtedly enhance supply chain efficiencies and reduce agricultural wastage, which are critical for our sector. The plan to initiate 1 crore farmers into natural farming with support for certification and branding is another commendable step. Moreover, the comprehensive review of the agricultural research setup promises to increase productivity and develop climate-resilient varieties, overseen by domain experts to ensure relevance and effectiveness. The substantial provision of INR 2.66 lakh crore for rural development and the Rs 26,000-crore boost to road connectivity projects are also welcome moves. These efforts will greatly improve market access and distribution networks, facilitating better reach for FMCG products in rural areas.”
However, Manish Aggarwal added that there was a hope for more aggressive measures in terms of income tax reforms and increased grants to spur consumer spending and innovation. “While the focus on rural infrastructure and agriculture is crucial, additional support through enhanced Employment Linked Incentives (ELI) and Production Linked Incentive (PLI) schemes was necessary to further bolster India‘s manufacturing sector. Continued emphasis on these areas would have provided a more holistic boost to the FMCG industry,” he said.
Vivek Jalan, Partner, Tax Connect, said, “It is heartening to witness that many of the valid recommendations of Trade Bodies have seen light of day in this Union Budget, making this budget a reflection of a Budget For the People, By the People and of The People. The Full Union Budget 2024 lays down the roadmap of the next five years. Propelled by a robust Tax Revenue buoyancy of 1.4 during FY 23-24 the focus now is on job creation through GDP growth by putting in more disposable income in the hands of the common man. New Income Tax Scheme relaxations in standard deduction, slabs reduction and family pension deduction relaxation may help in savings of around Rs 35000 per taxpayer.
As requested by the Trade & Industry bodies and laid down by the Economic Survey, for MSME businesses the compliance burden is also sought to be relaxed; litigations will be reduced in new VIVAAD SE VISHWAS SCHEME.
TDS provisions have been relaxed substantially like relaxation of rectification timelines, penalties, reduction in TDS Rates u/s 194O for E Commerce operators.
Big Corporations have been motivated to invest more in Plant, Machinery, Equipment in IPR and make in India by relaxations on import duties.
To prevent drain of wealth from India where certain MNCs show less profit in India and more outside India, this budget has pushed for Global Minimum Tax of 15% and promoting safe Harbour Rules.
The GST Amnesty Scheme for waiver of interest or penalty or both, relating to demands raised under Section 73, for FY 2017-18 to FY 2019-20;, and making the new time limit for availing ITC as per Section 16(4) of the CGST Act as 30/11/2021 to avail ITC pertaining to financial years 2017-18, 2018-19, 2019-20 and 2020-21; are an icing on the cake.”
Milan Mody, Managing Partner, NA Shah Associates, said, “All in all, the budget is a mixed bag. On one hand the budget has announced several measures to generate employment and benefit to the common man. The change in taxability of capital gains would have an adverse impact on the Capital Market. The move toward a simplified tax regime and to reduce litigation are very welcome moves. The cut in tax rates for foreign companies will boost Foreign Direct Investment in India.”
Saunak Saha, Partner, Climate Change and Sustainability Services, EY India, said, “The budget‘s focus on energy security and climate resilience is commendable. The PM Surya Ghar Muft Bijli Yojana, which aims to install rooftop solar panels on 1 crore homes and provide up to 300 units of free electricity per month, stands out as a significant initiative. Expanding the list of exempted capital goods for solar energy projects is crucial for accelerating the energy transition. Additionally, investments in nuclear research and development, along with climate finance for hard-to-abate industries, bolster this well-rounded strategy.”
“New and additional employment incentives across manufacturing and other sectors will encourage workforce growth and bolster the Make in India initiative. These incentives complement existing PLI schemes and provide additional income tax benefits for hiring more employees.”
Raj Ramachandran, Partner, JSA Advocates & Solicitors, said, “The proposal to reimburse employers upto Rs 3000 per month for 2 years for employee’s provident fund contributions is an interesting change with the government lending a hand and nudging employers towards new employment generation. Additionally, the new scheme will provide a month’s wage and contribute to provident fund, applicable to new workforce in formal sectors, thereby encouraging new hires. Other applicable conditions for the benefits remain to be seen, but definitely a step in the right direction to address a key issue of employment.”
Ankit Aggarwal, Founder & CEO, Unstop, said, “I am glad to see Budget 2024‘s focus on youth employment and skilling. The Rs 2 lakh crore allocation for employment schemes is the beginning to a brighter future. The incentives for job creation and the plan to skill 20 lakh youth over five years is what we needed.The support for higher education loans and the push for women in the workforce is also a big plus. It feels good to see the government recognising the need to focus on key areas that can make our journey towards a skill based economy smoother.”
Deepthi Alexander, Partner, Indirect Tax, BDO India, said, “The Budget has emphasized on the importance of manufacturing and services. The introduction of the Credit guarantee scheme for MSMEs, enhancement of mudra loans and the introduction of E-commerce hubs under the PPP model will not only boost revenue in these sectors but also fuel employment and provide for higher wage opportunities.”
Pallavi Dinodia, Co-Chair, Direct Tax Committee, PHD Chamber of Commerce and Industry, said, “The recent budget announcement by the Finance Minister outlines nine key priorities for India‘s development. Emphasis is placed on boosting productivity in agriculture, fostering employment and skill development, and promoting inclusive human resources. The focus extends to enhancing manufacturing capabilities, urban development, and ensuring energy security. Significant investments are also planned for infrastructure, innovation, and research. Additionally, the budget aims to implement next-generation reforms to drive sustainable and inclusive growth. These strategic areas are expected to propel India’s economy forward, creating a robust and resilient framework for future prosperity.”
“Digitizing land records in India aims to streamline property transactions, reduce fraud, and enhance transparency. It ensures accurate and accessible records, aiding in dispute resolution and efficient land management. This modernization will promote economic growth by facilitating investments and development projects, ultimately empowering landowners with secure and reliable documentation.”
Atul Parakh, CEO, Bigul, said, “The 2024 budget‘s social sector measures could potentially boost rural demand, benefiting FMCG companies. Increased allocations for schemes like MGNREGA and agricultural support may improve disposable incomes. However, the consumption story remains mixed, with urban demand outpacing rural. Sectoral rotation is possible as investors reassess valuations post-budget. FMCG might see renewed interest, but it’s crucial to be selective. Focus on companies with strong rural penetration and value positioning. Cautious optimism is warranted. Monitor Q1 FY25 results for concrete signs of demand recovery before making significant portfolio shifts.”
Finance Minister Nirmala Sitharaman announced that the government has dedicated funds for the development of the Vishnupad Temple Corridor and the Mahabodhi Temple Corridor in Bihar. She also said that Nalanda will be transformed into a tourism hub.
Finance Minister Nirmala Sitharaman said, “GST has significantly reduced tax incidents for the common man and eased compliance for industry, marking a success of vast proportions. To further enhance the benefits of GST, we will strive to rationalize the tax structure.”
Receipts for FY25: Rs 32.07 lakh crore
Expenditure for FY25: Rs 48.21 lakh crore
The Finance Minister said that the fiscal deficit for FY25 is further scaled down to 4.9 per cent from 5.1 per cent as estimated in the interim Budget. She said that the aim is to reach a fiscal deficit to below 4.5 per cent by FY26.
Ravi Shankar Singh, Managing Director, Residential Transaction Services, Colliers India, said, “Further boost to the Pradhanmantri Aawas Yojna would help in reducing housing shortage and generating employment. Lower stamp duty would reduce property acquisition cost.”
FM Nirmala Sitharaman announced a Rs 2.2 lakh crore boost for urban housing. She announced that housing needs of 1 crore urban poor and middle class families will be addressed with investment of Rs 10 lakh crore. The government also plans to expand the Pradhan Mantri Awas Yojana (PMAY) by making provision for 3 crore more houses under the scheme.