Mr. SANJAY JAIN, DIRECTOR, ELANPRO
welcome the budget announced by the Honourable Finance Minister. The proposed schemes and policies in the Union Budget 2024-25 suggest a strong and inclusive strategy for driving economic growth, enhancing employment prospects, and promoting sustainable development across multiple sectors. Emphasizing on skill development, support for MSMEs, urban and rural advancement, women’s involvement, energy security, and technological innovation, it sets out a plan for ‘Viksit Bharat’.
The budget prioritizes enhancing MSMEs by introducing a new credit assessment model based on digital footprints, and offering term loans for machinery and equipment purchases without requiring collateral or a third- party guarantee. Moreover, establishment of new SIDBI branches in MSME clusters to enhance reach and provide direct credit to businesses will significantly improve cash flow in the market and support various industries including ours.
Focus on domestic tourism is expected to boost HoReCa growth, which in turn will boost the commercial refrigeration industry. The budget also allocates financial support to establish 50 irradiation units in the MSME sector and 100 NAB-accredited food quality and safety testing labs. These measures will enhance food safety and quality, making compliance crucial.
The standout measure of this budget is the focus on youth employment especially measures such as job creation in manufacturing is expected to benefit 30 lakh youth and their employers. The budget also aims to revitalize agriculture through several measures. By concentrating on vegetable production and improving the supply chain, farmers will achieve better returns through crop diversification and expanded market access. Large-scale vegetable production clusters that will be established near major consumption centers will help farmers capitalize on market opportunities. While these measures are encouraging, it’s vital to ensure they are effectively implemented and maintained to translate these announcements into actual progress on the ground. We eagerly await the positive effects of the budgetary allocations on the well-being of our citizens.”
Mr. Vedanshu Kedia, Director, Prescon Group
“While the reduction in the long-term capital gains (LTCG) tax rate from 20% to 12.5% is a welcome move, the removal of the indexation benefit presents a mixed impact for property sellers. The indexation benefit has historically allowed sellers to adjust the purchase price of their property for inflation, thereby reducing the taxable gains. Without this adjustment, sellers may end up paying more tax in real terms, especially in a high-inflation environment.
For many property owners, particularly those who have held their assets for a long period, the lack of indexation could result in a higher tax outgo than under the previous regime. This change might affect long-term investors and could potentially dampen the enthusiasm for long-term property investments. However, it is also essential to consider that the lower tax rate could incentivize more transactions and boost liquidity in the real estate market.
Ultimately, the real impact will vary based on individual circumstances, including the rate of inflation and the holding period of the property. It is advisable for property owners to closely analyze their specific situations and possibly seek professional tax advice to navigate this new landscape effectively.”
Ms. Aparna Reddy, Executive Director, Aparna Enterprises Ltd
The 2024-25 budget presents a promising roadmap for India’s growth, with a strong focus on infrastructure development in both rural and urban areas. The record-breaking allocation of ₹11,11,111 crore for capital expenditure (3.4% of GDP) signifies a strong commitment from the central government in this area. The budget also encourages private sector participation in infrastructure development. Initiatives like viability gap funding and enabling policies create a supportive environment for companies to contribute their expertise and resources in the infrastructure, housing, and building materials sectors. This renewed emphasis on infrastructure, particularly in rural areas through PMGSY Phase IV, will accelerate the infrastructure works in these regions. We believe that the improved connectivity in rural areas, connecting 25,000 habitations, will create a significant demand for roads, bridges, and power grids etc. This will drive activity for construction companies and create a ripple effect throughout the building materials industry, with increased demand for cement, steel, and other essential materials. Furthermore, improved rural connectivity will act as a catalyst for housing demand. Easier access to markets and services will incentivize people to build new homes or renovate existing ones, leading to increased demand for housing materials and construction services.
Beyond this, the investment of ₹10 lakh crore to address the housing needs of the urban poor and middle class under PM Awas Yojna Urban 2.0 will spur growth in the real estate industry and the demand for construction materials.
By focusing on overall infrastructure development, this year’s budget presents a strategic opportunity for India’s economic growth and strong steps to realise the dream of a developed India @ 2047.
Faced by a trade-off between fiscal consolidation and expectations for measures to boost demand, the FY25 Budget struck a fine balance by continuing to consolidate finances while also tackling social sector demands, with a focus on saving over spending. The strong revenue handover from the prior year was evenly split between tightening the fiscal deficit target by a further 20bp to -4.9% of GDP vs the interim budget and rest towards the increase in revenue spending. Nominal GDP forecast was maintained with conservative tax buoyancy assumptions, leaving the room for additional revenue cushion.
Radhika Rao, Executive Director and Senior Economist, DBS Bank
The budget also focuses on structural improvements, including efforts to boost job creation and skills development, promoting exports through adjustments in import tariffs, and making direct tax changes such as reducing corporate tax for foreign firms and increasing capital gains tax as a cautious preventative measure. Overall, Budget measures were focused on incremental steps towards taking the economy towards the Viksit Bharat 2047 goalpost of reaching a ‘Developed India’ status.
Additionally, fiscal consolidation and macroeconomic prudence were prioritised, tightening the FY25 fiscal deficit by a cumulative 70bp to -4.9% of GDP (vs interim -5.1%) compared to -5.6% of GDP in FY24, aiming to consolidate finances without imparting a negative impulse to growth and demand. This aims to consolidate finances while avoiding a negative impact on growth and demand. The revenue from the RBI’s surplus transfer and robust direct tax collections was allocated between reducing the fiscal deficit and increasing revenue expenditure. Looking ahead, the government has signalled a continued reduction in both deficit and debt levels, aiming for around -4.5% of GDP by FY26. This adjustment in the fiscal stance is expected to lead to better expenditure quality and reduced borrowing costs due to lower yields.
Ramana Prasad, Founder & Chairman, Meritus AI
The Union Budget 2024, unveiled today, introduces ambitious initiatives under the ‘Viksit Bharat’ framework aimed at transforming skill development and fostering innovation. Ramana Prasad, a distinguished figure in the technology sector, highlights the government’s strategic focus on enhancing the country’s skill ecosystem to meet future demands.
Key initiatives include the provision of education loans up to Rs. 10 lakh annually for higher education within India, with e-vouchers ensuring a 3% interest subvention. Additionally, plans to upgrade 1,000 ITIs nationwide and establish new medical colleges and sports institutions in Bihar underscore the government’s commitment to comprehensive skill enhancement.
The Union Budget 2024 marks a significant leap towards building a skilled and competitive workforce through Viksit Bharat,” said Mr. Prasad. “These initiatives will empower individuals with the necessary skills to thrive in evolving industries like AI and cybersecurity.”
Furthermore, the budget outlines measures to boost women’s participation in the workforce, including the establishment of working women’s hostels, creche facilities, and specialized skilling programs. Over Rs. 3 lakh crore has been allocated for schemes benefitting women and girls, aiming to promote economic independence and empowerment.
As a supporter of technological advancement, Mr. Prasad commends the budget’s focus on innovation and research, particularly through initiatives like the Anusandhan National Research Fund and the venture capital fund to expand the space economy.
Krishna Veer Singh, CEO & Co-Founder – Lissun (Mental Health Platform)
We commend the Union Budget 2024-25 for its landmark decision to abolish the angel tax, which will undoubtedly invigorate the startup ecosystem and unlock new investment opportunities for over 1,41,000 DPIIT-registered startups. In addition to the angel tax abolition, the extension of the ‘eligible startup’ definition under the Startup India scheme to include entities incorporated between April 1, 2016, and March 31, 2025, is a welcome move. This extension will enable a broader range of startups to benefit from the tax holiday, thereby enhancing support for innovative ventures across various sectors. We are also encouraged by the allocation of ₹1000 crore to fund space startups, which highlights the government’s commitment to advancing high-tech and frontier industries. However, while these measures are promising, we feel that the budget could have given more attention to the pressing needs of the mental health sector. At Lissun, we had hoped for a more substantial focus on mental health, particularly in funding for mental health care and services. Increased investments in digital mental health solutions, integration of mental health into primary healthcare, and incentives for startups innovating in this space are critical. Additionally, addressing the shortage of mental health professionals through targeted skill development, expanding educational programs, and integrating mental health education into school curriculums would have been pivotal. We urge the government to consider these areas in future budgets to ensure that mental health receives the attention and funding it urgently needs.”
Nalini Shankar, Associate Director, Climate & Disaster, Palladium India –
“As we continue to navigate the challenges of a changing climate, I am heartened to see the centre reaching out to states that are vulnerable to natural disasters such as floods, cloud bursts and landslides.
The Union Budget’s special funds to Sikkim, Uttarakhand, to Assam for flood resilience, and assistance to Himachal Pradesh for reconstruction and rehabilitation through multilateral development, and allocation of Rs 11,500 crore for Bihar, are welcome moves. The allocation of resources towards climate adaptation and mitigation strategies resonates with the need to build a more sustainable future. I firmly believe that climate sensitive investments are the way forward.
Efforts to create resilience are incomplete without a focus on the people and communities that are most affected by climate change.
And, environmental sustainability is intrinsically linked to well-balanced commitments to sustainable employment and growth. This is possible with a focus on holistic and robust policies.
A priority highlighted in the budget, of increasing productivity and resilience in agriculture with development of climate resilient crops is a positive step in this direction.
The ‘taxonomy for climate finance’, and the policy document that the government intends to develop for appropriate energy transition is yet another appreciable announcement.
We all play critical roles in supporting these efforts. By adopting sustainable practices, investing in climate resilient infrastructure, and promoting climate literacy, we can all contribute to creating a more resilient future.”
Syed Masood, Managing Director of Heritage Institute of Management and Communication in New Delhi
He praised the government’s decision to offer E-vouchers for loans up to ₹10 lakh for higher education in domestic institutions. The move will significantly reduce financial barriers for students, making quality higher education accessible to all. It is a positive step towards giving our students with the abilities and understanding they need to succeed in today’s competitive environment.”
Mr. Indranil Pan, Chief Economist, YES BANK
The Budget takes a leaf out of the strategic direction to sustainable growth that has been penned by the Economic Survey. Thus, even with one eye on the fiscal consolidation, the government announced structural measures to boost employment – not only in terms of numbers but also quality, addressed the need to scale up MSMEs through credit facilitation to the sector – even for MSMEs that do not strictly have a formal accounting system. To aid small business, the mudra loan limits have also been enhanced. We believe that this is a budget for the longer term while near term consumption boost comes through providing benefits to income taxpayers. The Budget also promises structural reforms in the factors of production and use market forces to boost the growth story. Equity market participants may not have been happy with the Budget as the STT, LTCG tax rates go up. However, this was government’s way of casting its tax net wider. We see a reduction in the market borrowing programme by Rs 120 bn while net T-bill issuance is lowered by Rs 1 tn over the interim Budget. The reduction in the net T-bill issuance may aid domestic liquidity and push down short-term rates while long tenor rates may remain sticky.