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.
“The focus on providing funding through banks to MSME is a great initiative.
1. Providing collateral free loans using a credit guarantee scheme
2. Alternate methods to evaluate eligibility of MSME for loan
3. Increasing Mudra threshold to 20 L for msme which have successfully paid back the loan before
4. Increasing reach of institutions through SIDBI etc.
These initiatives addresses the major issue for MSMEs today which is access to Credit by increasing the reach and reducing threshold.”
Abhishek Gupta, Founder and Managing Partner at Pierag LLP Consulting, said, “Our experience shows that access to finance is a critical barrier for many MSMEs looking to scale their operations and modernize their production processes. This initiative not only alleviates financial constraints but also encourages technological advancements and productivity improvements within the sector. We advise MSMEs to leverage this opportunity to invest in state-of-the-art machinery and equipment, which can lead to enhanced operational efficiency and better market positioning. Overall, this credit guarantee scheme is a promising development for the MSME sector, and we look forward to witnessing its positive impact on the growth and sustainability of businesses across the country.”
Finance Minister Nirmala Sitharaman said that the government will expand the branches of the Small Industrial Development Bank of India (SIDBI) to serve the MSME clusters within three years. The branches will cover 168 clusters of the total 242 clusters, she added.
Finance Minister Nirmala Sitharaman made announcements for growth of MSME sector, which included:
Ashish Aggarwal, Director, Acube Ventures, said, “The latest decision of the government to refund up to Rs 3,000 per month for two years towards EPFO contribution for every additional employee is a game-changing step for both employers and job seekers. Available under the Rs 1.48 lakh crore assigned to education and employment, this step does double duty by incentivizing companies with an increased workforce, which also goes on to mean massive job creation in the near future across all quarters. Meaningful financial load reduction among employers, especially among MSMEs and startups. For workers, this guarantees first-day social security protection. For both parties, the two-year duration of support is quite a long runway for businesses to incorporate new employees. This policy will be very instrumental in formalizing jobs—especially in those sectors where the rate of informal employment is very high—in order to enhance the social security network and the overall stability of the economy.”
Gaurav Singh Parmar, Associate Director, Fincorpit Consulting, said, “The allocation of Rs1.48 lakh crore for education, employment, and skill development in the Budget of 2024-25 is a big step toward investing in human capital development. This massive investment, routed through EPFO, underlines that the government does recognize the existence of a linkage between education, skills, and employment. The budget has sought to tackle the skills deficit in India‘s workforce and enhance employability through this holistic approach. The allocation is opportune and assumes special significance against the backdrop of India’s demographic dividend and the rapidly changing nature of jobs across the world. More remarkably, at a time when all schemes that were announced in the February Interim Budget are yet to be implemented, it shows a continuity of policy direction. This holistic strategy—linking education with skill building and employment support—can arguably further the pace in transforming India into a knowledge economy and enhance its competitiveness globally.”
Gopal Bohra, Partner, NA Shah Associates, said, “Internship opportunity in 500 top companies to 1 crore interns will be provided. This will help the government to develop skills of youth at their early age and make them employable in the skilled sector.”
Finance Minister Nirmala Sitharaman announced a scheme to boost job creation in the manufacturing sector. This scheme, the finance minister said, will offer incentives for EPFO contributions to both employees and employers for the first four years of employment. She added that it is expected to benefit 3 million youth and will cover additional employment across all sectors. The government will reimburse employers up to Rs 3,000 per month for two years for each additional employee’s EPFO contributions. The initiative aims to incentivize the employment of 5 million additional people, Nirmala Sitharaman said.
Jaideep Kewalramani, COO & Head of Employability Business, TeamLease Edtech, said, “The FY25 budget signals continuity and a forward-looking framework to strengthen India‘s growth trajectory. By prioritizing employment and skilling, inclusiveness and social justice, infrastructure, innovation, and next-generation reforms, this budget not only addresses immediate challenges but also lays the foundation for a knowledge based growth economy. Women participation in the workforce is absolutely essential for sustained GSP growth and realising the vision of developed India. Creating an ecosystem that supports women in the workforce that is culturally aligned is important. Encouraging higher education and skill development among females is another critical aspect that requires thrust.”
Prashant Daftary, Partner, NA Shah Associates, said, “Incentives for new employment to manufacturing industries would give a significant boost to employment. The benefits and eligibility are significant to cover a large section of new employees.”
Productivity and resilience in Agriculture
Employment and skilling
Inclusive HRD and social justice
Manufacturing & services
Urban development
Energy security
Infra
Innovation, R&D
Next generation reforms
Finance Minister Nirmala Sitharaman announces Rs 2 lakh crore package for 5 schemes focused on jobs, skilling to 4.1 crore youths.
Finance Minister Nirmala Sitharaman has started her Budget speech in the Parliament. “People have reposed their faith and elected the NDA government for the third time,” she said, while maintaining that the poor, woman, youth and farmer are focus areas of this govt.
Prerna Kalra, Co Founder, Daalchini Technologies, said, “As we approach the upcoming budget, it is imperative to focus on policies that drive the manufacturing sector towards technological innovation. We advocate for incentives that support the adoption of advanced technologies like AI and IoT, which are vital for boosting efficiency and enhancing global competitiveness. Additionally, policies that reduce the cost of capital and offer tax holidays for new ventures will significantly bolster the sector’s growth.”
Prerna Kalra also advocated for substantial investment in infrastructure, especially in logistics, to streamline supply chains.
In the retail sector, she added, simplifying regulatory compliance and licensing through digital platforms will greatly enhance business operations. “Implementing a single-window clearance system and streamlining export-import tax policies will reduce administrative burdens and costs, thereby improving market access.” Prerna Kalra said. “We also recommend providing tax incentives or subsidies for investments in digital technologies and e-commerce. Expanding reliable internet access in rural and semi-urban areas will broaden the reach of digital retail, fostering greater inclusivity. Lastly, lowering the GST rate for essential products to 5% will make these items more affordable, stimulating demand and benefiting the entire supply chain,” she said.
Ashok Singh Jaunapuria, MD and CEO of SS Group, said, “We look forward to the Union Budget 2024 with anticipation of tax reforms, more incentives for affordable housing, higher investment in urban infrastructure, and streamlined regulatory procedures. These steps will increase the sector’s growth while also improving homeownership’s accessibility and sustainability.” He also said that the government should consider increasing the interest deduction limit to encourage homeownership. “By enhancing tax benefits, potential homebuyers will have stronger incentives to invest in real estate, thereby supporting individual financial security and driving market growth,” he added.
Moreover, higher investment in urban infrastructure, he said, can improve connectivity and quality of life, making urban areas more attractive for both residents and investors.
Arun Awasthy, President & Managing Director, Johnson Controls India, said, “In the interim budget that was announced mere months ago, the government outlined the New Green Deal, demonstrating its commitment towards achieving green growth and sustainable development. The provisions under this though predominantly focused on aspects of renewable energy and clean fuels, we are optimistic that the upcoming Union Budget, building on this, will drive focus towards strengthening the energy efficiency of India’s building infrastructure (built environment), considering its potential to bring down the national carbon emissions disproportionately. Additionally, provisions to bolster the skilling and innovation initiatives pertaining to green technology will be key in bridging the existing gaps.”
Tejinder Gupta, Partner, Grant Thornton Bharat, said, “Spiritual, heritage, cultural, and offbeat tourism are expected to see continued high demand, driven by rising domestic travel. Enhanced airport infrastructure in tier 2, 3, and 4 cities will support this sector’s growth, along with ongoing projects for port connectivity and tourism infrastructure.” Further, he also said that the industry is anticipating reductions and uniformity in GST rates for hotel room categories and reduction in income taxes to boost disposable income, along with annual LTA exemptions to encourage domestic tourism consumption. Also, per Tejinder Gupta, extended industry status to the hospitality industry along with enabling provision of affordable-rate infrastructure funds for the private sector would go a long way for large scale developments. “It is also expected that strategic policy reforms and skill development initiatives shall be initiated to ensure a vibrant and sustainable future for the Indian hospitality sector,” he said.
Varun Babbar, Managing Director for India and SAARC at Qlik, has expressed anticipation for the government under Prime Minister Modi to strongly support the ‘Viksit Bharat’ initiative. “This transformation requires placing technology at its core,” he said. Babbar emphasised the importance of prioritising the adoption of digital technologies across critical sectors, especially in governance, to enhance inclusivity and efficiency in delivering social and welfare schemes. As AI continues to transform sectors like healthcare, finance, manufacturing, and education, proactive measures to ensure its responsible development are crucial. He underscored the need for future AI guidelines to emphasise safety, ethical standards, and societal welfare while fostering innovation. Designing AI with a human-centered approach—focusing on fairness, transparency, and accountability—is essential to address ethical concerns and mitigate risks associated with AI misuse, such as deepfake technology and job displacement.
Gaurav Agarwal, Co-Founder of Gamezop, has emphasised India‘s position as the world’s fifth-largest economy and the fastest-growing major nation, having secured record foreign direct investment (FDI) in the past five years and made significant progress in infrastructure and the digital economy. Looking ahead to the Union Budget 2024, Agarwal stressed the importance of prioritising the growth of India’s export revenue, particularly highlighting the immense potential of the gaming industry. He noted that the global gaming market generates a staggering $200 billion annually and believes that with supportive policies, India can become a major player in this field. Agarwal underscored the need for India to evolve from being one of the largest content-consuming nations to a content-creating nation.
Arjun Bajaj, Director of Videotex, has emphasised the need for the Indian government to prioritise comprehensive support for local electronics manufacturing, particularly in the television industry, in the upcoming Union Budget. He pointed out that while mobile phone manufacturing has received numerous incentives, the TV manufacturing sector, despite contributing nearly USD 12 billion to the economy, has been neglected. Bajaj called for the long-awaited Production Linked Incentive (PLI) scheme to extend its benefits to televisions or to introduce alternative manufacturing incentives, especially for smart TVs. He also highlighted the outdated classification of TVs larger than 32 inches under the GST slab for luxury goods. Bajaj argued that televisions are no longer a luxury item but a necessity for over 200 million households in India. He suggested revising this GST classification to make TVs more affordable, thereby boosting the sector and making these essential devices more accessible to a broader population. Additionally, Bajaj noted the industry’s heavy reliance on imports for critical components like semiconductors and display fabs, primarily sourced from China and Taiwan. This dependence exposes the industry to price volatility and supply chain disruptions due to geopolitical tensions. While the government has initiated efforts to establish semiconductor manufacturing in India, Bajaj stressed the importance of expediting these projects and developing domestic display manufacturing capabilities.
Ravi Kunwar, Vice President of India & APAC at HMD, has expressed optimistic expectations for the Indian smartphone market in light of the upcoming Union Budget 2024. HMD expects initiatives that will further drive domestic manufacturing and cultivate a thriving mobile phone ecosystem in India. Kunwar emphasised the importance of extending or enhancing the Production Linked Incentive (PLI) scheme, noting that this policy has significantly boosted domestic manufacturing. The continuation of the PLI scheme is seen as crucial for developing a robust indigenous component supply chain. Additionally, HMD hopes the government will prioritise policies that incentivise the production of key smartphone components within India, thereby fostering a self-reliant ecosystem.
Avneet Singh Marwah, CEO of Super Plastronics Pvt Ltd, expects the government will reduce the GST rate on LED TVs larger than 32 inches from 28% to 18%. This reduction is expected to stimulate consumer spending in the electronics sector. Additionally, expanding the PLI (Production-Linked Incentive) schemes to include smart TVs, refrigerators, and washing machines is crucial for market expansion and enhancing manufacturing capabilities, Avneet said.
Nilaya Varma, Co-Founder and CEO at Primus Partners, said, “It is after a very very long time, one has seen such high expectations from a budget. It is never easy to balance the needs and hopes of 1.4 billion people. However, we also have a FM who has the experience (7th year) to be able to deliver. Outside of how to boost short term consumption and tweaks to duties, one will be keen to see specific initiatives and spend on capital projects, encouragement to private investments, revival of manufacturing growth to absorb growing job demands coming out of the farm sector and fiscal discipline to meet the goals of Viksit Bharat.”
Infrastructure: The interim budget proposed a 11% hike in capital expenditure for infrastructure and employment generation, totalling Rs 11.11 trillion for 2024-25.
Housing: The interim budget had announced that under the PM Awas Yojana (Grameen), the government will construct two crore homes in rural areas over the next five years and introduce a new scheme to provide housing for the middle class.
Railways: The finance minister had outlined three major economic railway corridor programmes under the PM Gati Shakti initiative. Additionally, the budget had announced that 40,000 rail bogies would be upgraded to Vande Bharat standards.
Tourism: The budget had proposed development of iconic tourist centres, with support from states for marketing and branding. The finance minister had also proposed a new framework for rating tourist centres based on the quality of facilities.
Green energy: The budget had announced plans to establish a coal gasification and liquefaction capacity of 100 MT by 2030 and introduce phased mandatory blending of compressed biogas into compressed natural gas.
Research and innovation: To drive growth, employment, and development, the finance minister, in her budget speech, also proposed a Rs 1 trillion fund with a 50-year interest-free loan alongside a new scheme for deep-tech defence technologies and promoting self-reliance.
Free power: The budget had proposed 300 units of free power per month through a rooftop solarisation scheme, aimed at benefiting around one crore households.
Healthcare: The budget had announced the extension of coverage under the Ayushman Bharat scheme to ASHA workers, Anganwadi Workers, and helpers.
Priyanka Duggal, Partner, Grant Thornton Bharat, said, “The consumer industry is hopeful for rationalisation of the provisions of accelerated tax incentives for employment generation, simplified tax structures as well as adding incentives for the startups looking at reverse flip to Indian holding companies, retail centric initiatives for digitisation simplifying the equalisation levy, and TDS and TCS provisions. From a direct tax perspective, the Interim Budget 2024 seems to have missed extending the concessional tax rate of 15% for new manufacturing companies. Reflecting on the sector’s growth, a clear ask from the Budget will be to reinstate the same. With technology and AI becoming critical for retail and e-commerce companies, the need of the hour is to promote digitisation for businesses and introduce accelerated tax breaks on digitisation expenditures. Additionally, various global MNCs are looking to expand into the Indian waters. Therefore, tax and regulatory laws must strategically align to ensure a smooth inroad to bolster India’s growth story for the sector by offering clarity in regulatory laws and rationalisation/incentivisation from a tax perspective.”
Rajesh Magow, Co-founder & Group CEO, MakeMyTrip, said, “The upcoming Union Budget 2024-2025 offers an opportunity for the Hon’ble Finance Minister to build on this momentum. Strategic investments in this sector can unlock economic opportunities, boost employment, and enhance the competitiveness of India‘s tourism landscape.”
Here are key demands from the industry…
Kamal Nandi, Business Head and Executive Vice President, Godrej Appliances, said, “The durables industry will gain from measures that reduce input costs, encourage technological innovation towards building energy-efficient products, and lower taxation to induce appliance adoption and penetration in the country. With temperatures rising above 50°C in many cities, ACs are certainly becoming a necessity. GST reduction will make ACs more affordable to masses and improve the quality of life for many more Indians. We also need to recognise the environmental impact of appliances and recommend addressing it with lower tax rates for consumers to switch to 5-star rated products.”
Kuljit Singh, Partner, EY India, said, “India’s upcoming budget must address critical infrastructure reforms to propel economic growth and sustainability. Key expectations include ramping up private participation in airports and railways by inter-alia privatising existing airports, privatising or listing Dedicated Freight Corridor (DFC) corridors. There is also a pressing need to reduce government stakes in rail-related entities like IRCON, IRCTC etc, thereby enabling the Govt to recycle freed capital.”
He added, “The declaration of the electric vehicle (EV) sector as infrastructure and the extension of benefits under the FAME scheme are imperative steps for enhancing EV penetration. Recognizing smart meters as essential infrastructure will enhance efficiency in energy management. Moreover, improving electricity distribution, particularly through innovative strategies such as central govt takeover of consistently poorly performing state discoms, is crucial given the preference against privatization in India. To stimulate the green energy sector, viability gap funding should be provided to encourage the production of green hydrogen and biofuels.”
Further, he said that rebalancing tax structures for domestic investors, considering disparities with foreign investors in same infrastructure investments, is essential for equitable growth. “Furthermore, alleviating pressure on banks from infrastructure debt can be achieved by establishing a new entity to purchase bonds from greenfield infrastructure projects and aggregating them for retail and institutional investors. Addressing cash flow challenges in infrastructure projects is paramount,” said Kuljit Singh.
Pratik Agarwal, MD Sterlite Power and Chairman Serentica Renewables, said, “As Prime Minister Modi embarks on his historic third term, I am eager to witness the Government’s continued commitment to advancing India‘s clean energy transition.”
While elaborating on expectations from the power sector, Pratik Agarwal said, “I hope this term focuses on achieving a comprehensive turnaround of discoms. Many initiatives have been taken in the past to incrementally improve the situation, but we expect strong steps in this direction to ensure the sector’s well-being. Pushing for full retail competition should be a focus. To maintain the momentum built in the last 5 years, it’ll be paramount to extend full ISTS waiver for another 2 years for sustaining RE adoption by all categories of power consumers.” He also said that the government is expected to open the sector to source the most competitive components globally, with a focus on swift and cost-effective deployment of RE and transmission in the country.
“As we add unprecedented green energy to the grid, the next phase must also concentrate on preparing the country for large-scale RE integration. This will entail strong policy push towards strengthening interconnectors with neighbouring nations, deploying extensive energy storage solutions, and exploring upcoming technologies like Small Modular Nuclear Reactors (SMRs) for a diversified energy mix,” he added.
Sanjay Choudhari, Chairman at SBL Energy, said, “As we operate in a high-risk industry landscape, industry eagerly looks forward to targeted support in the upcoming budget. We advocate for subsidies or incentives to alleviate high production costs and encourage investments in safety measures. Increased funding and specific allocations within PSU initiatives are critical for sustainable growth. The industry needs adherence to stringent safety protocols and often seeks regulatory reforms or relaxed norms to streamline operations without compromising safety. Additionally, prioritizing support for training and skill development programs is essential for the industrial explosive sector to enhance safety standards and operational efficiency.”