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.
Tim Spurling, General Manager, Garmin India, said, “We hope for targeted incentives and tax reforms that stimulate local manufacturing and R&D investments in emerging technologies like AI-driven navigation and IoT-enabled devices. Such measures will not only bolster our capabilities to meet domestic demand effectively but also reinforce India’s position as a global hub for technology manufacturing and innovation. By fostering an enabling environment, the budget can propel Garmin India’s commitment to delivering cutting-edge solutions that empower individuals and businesses across the nation.”
While commending the government’s proactive steps in advancing India’s technological landscape, Tim Spurling said, “With the growing integration of GPS technology in sectors ranging from automotive to fitness, Garmin India anticipates policy support that accelerates digital adoption and innovation.”
Siddhartha Bhagat, Head, Logistics Division, Seros, said, “The National Logistics Policy in 2022 under PM Gati Shakti National Master Plan had already laid out the key objectives. Logistics industry is the pillar for any economy and again there are high expectations from Budget 2024. The primary aim is to reduce Logistics cost from 14% of GDP to 8% -10% of the GDP. Further there should be focus on infrastructure development for faster TAT and seamless movement of goods. India with its vast coastline and internal waterways have a huge potential in the push for multimodal Logistics thereby developing and integrating the local and global supply chain. Further it would be beneficial to reduce the GST rates on HCV and MCV for EV and Alternate fuels to encourage the industry to migrate to cleaner fuels.”
Balfour Manuel, Managing Director, Blue Dart, said, “The budget must align with the government’s strategic emphasis on bolstering domestic manufacturing. The expansion of multi-modal transportation and electric vehicle infrastructure holds significant promise, potentially creating 10 million new jobs by 2030. The National Logistics Policy’s commitment to enhancing infrastructure and accelerating connectivity projects will play a pivotal role in driving India‘s economic progress toward sustainability and prosperity.”
He further said that prioritizing infrastructure development and optimizing GST administration are fundamental steps necessary to foster sustainable growth within the logistics industry, which remains critical for India’s GDP growth and employment opportunities.
Ghazal Alagh, CIO & Co-founder, Honasa Consumer Limited, said, “I think this government has taken very strong leaps on the startup ecosystem through programs like Startup India, fund of funds etc. I would like to see further impetus for startups in this budget through measures on Angel tax, further allocation of funds and special focus on women led startups. In the last decade itself Indian startup ecosystem has generated over a million jobs, we can do far more in the coming decade.”
Further, Varun Alagh, CEO & Co-founder, Honasa Consumer Limited, said, “I am extremely optimistic about the budget and believe the government will continue to take a long term view of the economy. This for me will basically mean focus on stronger infrastructure investment, measures to boost job creation and improving consumption in the economy through better taxation for middle class india.”
Kami Viswanathan, President, FedEx, MEISA, “In the forthcoming budget, FedEx looks forward to transformative measures to accelerate growth in the logistics sector and propel India towards its USD 5 trillion economy goal. We anticipate seeing significant investments throughout the industry in multi-modal connectivity, including advanced air cargo terminals and infrastructure enhancements to create seamless trade corridors, aligning with the Prime Minister’s Gati Shakti Plan and the National Logistics Policy. We also anticipate continued focus on trade facilitation, streamlining and digitizing clearance processes, minimizing delays and enhancing cargo movement efficiency.”
Gouri Puri, Partner, Shardul Amarchand Mangaldas & Co, said, “Corporate India is awaiting Union Budget, 2024 with bated breath. On top of the list is the Government releasing or at least announcing draft GloBE rules and Qualified Domestic Minimum Top-up Tax rules under Pillar 2 given the international momentum. It will be interesting to see if there is any corresponding impact to the tax holiday for units in GIFT city. We also expect rationalization and streamlining of capital gains tax rates across asset and investor classes, which has been a long-standing demand from the industry. The hope is that the Government will also reconsider the Tax fair market value norms applicable to share issuance and transfer, given that their one size fits all approach is impacting genuine arm’s length transactions and hence capital inflows. Revival of the concessional 15% corporate tax rate for manufacturing companies would be welcome to give a fillip to make in India. Some clarity around implementing the Supreme Court’s decision around the MFN clause prospectively, will also give foreign investors comfort.”
Anmol Singh Jaggi, Chairman and Managing Director, Gensol Engineering Limited, “As India’s energy demand rises, boosting the share of renewables is crucial for energy security and sustainability, the upcoming union budget is expected to focus on achieving the 500GW target by 2030 and incentivizing technologies to reduce renewable energy intermittency, like energy storage solutions.”
He further added, “Battery Energy Storage Systems (BESS) are essential for advancing India’s renewable goals. Previous budgets have significantly increased funding for the advanced chemistry cell sector, showing the government’s commitment to energy storage. We anticipate continued support for cell manufacturing and BESS, along with Production Linked Incentives (PLI) for raw material processing. Additionally, growing the green hydrogen industry will likely be a key focus, replacing fossil fuels in transportation and hard-to-abate sectors like refining, steel, and cement.”
Deepak Sharma, MD & CEO, Zone President, Greater India, Schneider Electric, said, “With the upcoming union budget, we expect the government to harness the potential of manufacturing, create copious employment opportunities, and expand economic activity that will give further impetus to the current growth momentum. By focusing on self-reliance and resilience in global value chains, India can accelerate its growth trajectory towards being a Global Hub for Manufacturing and Innovation, thereby propelling the nation towards becoming a $7 trillion economy by 2030. Continued emphasis on infrastructure development—including roads, railways, ports, and digital infrastructure—will be crucial to enhancing connectivity while also stimulating economic progress across the country.”
He also talked about expectations on initiatives that will bolster the new energy landscape including green hydrogen, solar technologies, microgrids, and electric vehicles. “We also expect the budget to introduce policies incentivizing energy-efficient practices among companies. This will not only transform India’s energy landscape but also contribute significantly towards achieving the country’s net-zero goals and climate targets,” he added.
Dhiresh Bansal, Chief Financial Officer at Meesho, said, “Acknowledging the pivotal role startups play in steering India towards a 5 trillion-dollar economy, we recognize the need for sustained government support. India’s technological contribution to GDP is growing but remains in its early stages compared to other nations. The government’s involvement in encouraging venture capital and angel investment is commendable, and we believe that further emphasis on these initiatives will gradually elevate the number of startups in India. To foster continuous expansion, we advocate for an all-encompassing strategy.”
He also talked about the need to simplify processes associated with tax compliance and lowering tax rates, especially during the initial operational years. Further, he added, “With regard to talent attraction, a reduction in taxes related to Employee Stock Ownership Plans (ESOPs), presently standing at around 40%, will heighten the attractiveness of startups to skilled professionals, thereby contributing to the development of our vibrant ecosystem. This multifaceted approach aims to establish a conducive environment for startups, nurturing innovation, job generation, and sustainable economic development.”
V Balasubramanian, CEO, Financial Software and Systems, said that the government should look at charging digital payments. “Keeping in mind the government’s vision of Viksit Bharat, with India expected to become a developed country by 2047, Indian payment systems will play a big role in the years to come, not only in India but globally as well. And banks will be central to the growth of this ecosystem. The government should look at charging digital payments like UPI which will allow banks to build robust payment infrastructure & security standards enabling fast, simple & secure payments while protecting the end consumers against frauds & cyber security threats. Apart from this, the government should also focus on building a payment platform in cloud for banks. This is where cloud technology can play a major role in empowering banks to be more agile, cost-effective and collaborative in their endeavours to make digital payments safe and secure,” he said.
Vivek Iyer, Partner, Grant Thornton Bharat, said, “Given that India is a banking led economy, initiatives around liberalisation of foreign direct investment, rationalisation of foreign bank tax rates amongst others will help boost capital flows in the country, which will further accelerate the goals towards amrit kaal that the government set out for India.”
Experts said that there needs to be actions towards divestment in banks and insurance. Shravan Shetty, Managing Director at Primus Partners, said, “There is a wish for a reduction in government presence, particularly in the banking and insurance sectors. While divestment has been discussed over the years, there has been limited progress towards achieving this. Now is the right time for the government to consider divestment in banks and insurance to help supercharge the credit growth required for an above 8% growth rate.”
He further added, “The key ask of the financial sector is to maintain fiscal prudence. With the current account seeing improvement and record collections, it is the right time for the government to move towards the FRBM target. This will help keep rates stable and increase funding from global players, benefiting entities from banks to capital market players. The second expectation is consistency in tax policy, especially regarding the treatment of funds. This is important given the expected external flows in both bond and equity markets.”
With the Union Budget all set to be presented in the Parliament today, the banking sector is betting on policy continuity, financial stability, and digitalisation. Prashant Kumar, MD & CEO, YES Bank, said, “The government is expected to remain committed to the reforms process and be focused on eight key areas: sustainable growth, financial sector, infrastructure and investment, women, youth & farmers, last-mile connectivity, inclusive development, and economic expansion – all essential towards achieving ‘Viksit Bharat’ by 2047.”
“The government has exhibited its commitment towards fiscal discipline, much necessary to signal economic stability and build investor confidence,” he said, while adding that the Bank is committed to support the government’s push for enhancing digital infrastructure and promoting financial inclusion.
Here is a look at the list of major schemes launched since 2014 for the power sector:
In 2022, the Union Government ascertained that customs duty rates be calibrated to provide a graded rate structure – to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart metres. Further, duty concessions to parts of the transformer of mobile phone chargers and camera lens of mobile camera module and certain other items – to enable domestic manufacturing of high growth electronic items.
At the last year’s Budget, the government announced allocation of Rs 3000 crore to the Indian Semiconductor mission which aimed at fostering the development of the semiconductor and display manufacturing industries. This was aimed to aid in the design and production of various high-quality electronics, such as laptops, servers, tablets, PCs, and more.
The semiconductor industry is pinning its hopes on the upcoming Budget. Hitesh Garg, Vice President and India Country Manager at NXP Semiconductors, said, “India is committed to strengthen its ESDM ecosystem, as reflected in the government’s significant budget allocations and incentives. With India emerging as a major market for electronics, automotive, and electric vehicles, and a key hub for technical expertise, we feel the 2024 Union Budget to prioritise investments in digital infrastructure and offer incentives for research and skill development.”
Greetings, dear readers. Welcome to our live coverage of the Union Budget and how it will impact corporate India. With Finance Minister Nirmala Sitharaman all set to announce the Budget today, India Inc, players across sectors like real estate, consumer goods, SMEs, technology, among others are hoping for measures that would accelerate the growth of the country. We will take you through all these expectations and also announcements that will decide the further course of action for corporate India.