Tag Finance Minister Nirmala Sitharaman

Union Budget 2024-2025: Key Highlights and Expectations

July 11, 2024, _ Finance Minister Nirmala Sitharaman is gearing up to present the Union Budget for the Financial Year 2024-2025 on July 23, marking the first full budget of the Modi 3.0 government. Speculations abound regarding significant expenditure allocations towards welfare initiatives without compromising capital expenditure, buoyed by higher-than-expected dividend transfers from the Reserve Bank of India (RBI).

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The upcoming budget is anticipated to outline a comprehensive framework for India’s public finance, focusing on themes such as public debt sustainability and green finance. Sources suggest that India may target a fiscal deficit of 5.1% of GDP for FY25, reflecting a long-term economic policy aimed at fostering job creation through labour-intensive manufacturing and supporting MSMEs with enhanced credit access. The budget presentation is expected to provide a roadmap towards 2047, underscoring the government’s commitment to sustainable economic growth and inclusive development.

Industry experts have commented on what to expect from the Union budget.

Dr. Sheetal Jindal- MBBS, MD OBG, EPHM (IIM Kolkata) Senior Consultant and Medical Director_Director at Medical Genetics Program_Jindal IVF Chandigarh

While allocations for conditions such as sickle cell anaemia and thalassemia in the previous budgets are commendable, Jindal IVF stresses the need for Budget 2024-25 to broaden its scope. We urge the Government of India to integrate preventive strategies like Preimplantation Genetic Testing (PGT) for genetic disorders into national healthcare frameworks. Additionally, there is a critical need for increased funding towards assisted reproductive technologies, specifically IVF. We also advocate for public-private partnerships to ensure equitable access to essential reproductive treatments, particularly for the lower middle class. Furthermore, we propose tax incentives for private healthcare providers who offer discounted fertility treatments to economically disadvantaged patients. Moreover, we call for comprehensive insurance coverage for fertility treatments, addressing a critical gap in current healthcare policies. This should include coverage for multiple IVF cycles, as success often requires repeated attempts. Importantly, we recommend the implementation of a nationwide awareness campaign to educate the public about fertility issues and available treatments, reducing stigma and encouraging early intervention. Prioritizing these reforms in Budget 2024-25 can significantly enhance healthcare inclusivity and affordability across India, especially in the area of reproductive health and fertility treatments”

Mr. Sanjeev Srivastva, Chairman & Founder of Assotech Group, a leading real estate company.

As we approach Union Budget 2024, the real estate sector stands at a pivotal juncture, poised for significant developments and poised to continue its trajectory of growth and resilience. The past year has been a testament to the sector’s adaptability and resilience, marked by a remarkable rebound across various segments. This resurgence has been driven by robust demand in residential, commercial, and industrial real estate, underpinned by favorable macroeconomic indicators, stable lending rates, and an optimistic job market outlook. Looking forward, the industry’s expectations are centered around several key themes that are crucial for sustaining this momentum and fostering inclusive growth. At the forefront of these expectations is the urgent need to rejuvenate the affordable housing segment. Affordable housing not only addresses the critical need for housing among the lower-income groups but also serves as a catalyst for broader economic stability and social equity. The sector has seen a decline in sales in this segment, exacerbated by the aftermath of the pandemic and rising construction costs. To revitalize affordable housing, it is imperative for the government to reinstate incentives like the Credit-linked Subsidy Scheme (CLSS) and introduce targeted tax breaks. These measures will not only stimulate demand but also incentivize developers to undertake projects that cater to this underserved segment of the market. Furthermore, the grant of industry status to the real estate sector remains a longstanding demand that continues to garner industry-wide support. Recognizing real estate as an industry will not only enhance its access to institutional financing but also streamline regulatory processes and foster investor confidence. Coupled with this, initiatives such as a streamlined single-window clearance system and rationalization of Goods and Services Tax (GST) on real estate transactions are crucial steps toward reducing bureaucratic hurdles and enhancing operational efficiencies across the value chain.

At Assotech Group, we are deeply committed to advancing India’s urban development agenda through sustainable and innovative real estate projects. Our journey over the years has been marked by a steadfast dedication to quality, integrity, and customer-centricity. We have consistently strived to deliver projects that not only meet but exceed the evolving expectations of our customers while contributing meaningfully to the nation’s economic landscape.

As we navigate through dynamic economic landscapes and anticipate forthcoming policy reforms, Assotech Group stands ready to play a proactive role in shaping a vibrant and resilient real estate ecosystem. Our focus remains on leveraging our expertise and experience to pioneer transformative projects that not only enhance the built environment but also create lasting value for all stakeholders involved. We are committed to embracing sustainability as a core principle, ensuring that our developments not only meet current needs but also contribute positively to the environmental and social fabric of the communities we serve.

In conclusion, the upcoming Union Budget presents a crucial opportunity to chart a course for sustainable growth and development in the real estate sector. By addressing the sector’s key priorities such as affordable housing, industry status, and regulatory reforms, the government can unleash the full potential of real estate as a key driver of economic growth, employment generation, and social progress. Assotech Group stands ready to collaborate with policymakers, industry peers, and stakeholders to realize this vision and contribute to India’s journey towards becoming a global leader in real estate innovation and sustainability.”
This expanded quote not only outlines the sector’s expectations but also underscores Assotech Group’s strategic priorities and commitment to driving positive change in urban development through innovative and sustainable real estate solutions.”

Mr. D. S. Negi, CEO, Rajiv Gandhi Cancer Institute & Research Centre (RGCIRC)

As we look forward to the 2024 Budget, the focus on reforming cancer care in India is crucial. It’s important to prioritize funding for advanced treatments like immunotherapy and personalized medicine, ensuring more patients can access these cutting-edge therapies. Extending Ayushman Bharat to those aged above 70 will be highly beneficial for senior citizens. However, the current coverage limit of Rs. 5 lakh may not be sufficient for critical illnesses such as cancer, where treatment costs can range from Rs. 15-20 lakhs. Therefore, it is essential to consider increasing the coverage limit for critical illnesses like cancer to ensure adequate financial support for cancer patients.

Expanding screening programs for cancers like cervical, breast, and colorectal can catch diseases earlier, improving the chances of successful treatment. Building more specialized cancer treatment centers and supporting healthcare workers with better training are essential steps. Public awareness campaigns about prevention and symptoms will also play a key role in fighting cancer effectively. These efforts, alongside international collaborations and incentives for new cancer treatments, can bring significant improvements to cancer care across the country.”

Dr. Harshit Jain, Founder & Global CEO, Doceree II Healthcare

”Budget 2024 is a defining moment for the pharmaceutical sector in India. We look forward to robust support toward R&D and innovation through higher fiscal incentives and reduced GST on critical inputs to spur growth, foster technological advancement, and further fortify India’s leadership in global healthcare.”

Mr Gaurav Mittal, Director & CEO, Antarctica Equipment Private Limited.

As we approach the 2024 budget, it’s time for the Government to recognize the essential role that cafes, bakeries, confectioneries, sweet shops, bakery cafes, and ice cream parlours play in our hospitality industry.
To support these businesses in delivering top-notch services and high food quality, they need help setting up the right infrastructure. Given the ongoing recovery from the pandemic, a 15% capital subsidy on essential machinery, equipment, and temperature-controlled cabinets would greatly enhance food safety and quality.
Lowering the GST from 18% to 10-12% would provide much-needed relief. Financial support programs, including low-interest loans and microfinance options, are vital for helping small and medium enterprises expand and innovate.
Simplifying regulatory processes and offering compliance assistance will further encourage growth and ensure food safety. Streamlined processes could significantly increase compliance rates and improve food safety standards.
These measures will drive growth in the cafe, bakery, Sweetshops, confectionary and ice cream industries, fostering innovation and enhancing customer satisfaction. Supportive government policies can create a thriving ecosystem for these businesses, ensuring their continued contribution to the Indian economy.

Mr. Nikhel Bothra, Director, EPACK Prefab

The government is armouring the infrastructure industry to achieve its goal of becoming a developed nation by 2047. It has allocated 3.3% of the economy’s GDP to this sector in the fiscal year 2024, exhibiting the government’s commitment towards the USD 204 billion industry. The India Infrastructure sector is growing at a CAGR of 9.57% and is expected to reach USD 322.27 billion by 2029. Additionally, the demand for green buildings is on a steady rise, more so in the Asia Pacific region. The World Bank’s recent $1.5 billion loan to India has also played a major role in advancing a low-carbon energy future. This funding, aimed at enhancing energy efficiency and integrating renewable energy, complements the rising demand for green buildings. This synergy between financial support and market demand highlights the essential role of Pre-Engineered Building (PEB) technologies. PEB solutions are poised to meet the rapid demand for green infrastructure, ensuring sustainable and efficient development in line with India’s ambitious goals.

As a country, we must become more adaptable to pre-engineered buildings and prefabricated structures, as they are more evolved versions of construction. These are sustainable solutions to the construction demands of the country. In doing so, we are committing to innovation as well as environment-friendly practices. Considerations such as a constructive regulatory framework would enhance the utilisation of PEBs within the industry, and lowering GST or incentivizing the use of Prefabricated Engineered Buildings (PEBs) in government infrastructure projects could be instrumental steps in this direction. Furthermore, subsiding/incentivising the use of PEBs and prefab structures; or introductions of new schemes like the regional-connectivity schemes – UDAN & PM Gati Shakti scheme could be instrumental in realising the true potential of the country as a developed nation.”

Mr Vivek Jalan – Partner – Tax Connect Advisory Services LLP

As per recommendations of MSMEs, Section 43B(h) in Income Tax Act was introduced from AY 24-25. However, the alignment of the disallowance for payables u/s 43B(h) of The Income Tax Act has been made with MSME Act, which requires that payment has to be made to an SME within a maximum of 45 days. This is difficult in the present-day trade where 60-90 days credit period is the norm. In this budget it is expected that this provision will be relaxed/amended aligning the same with The CGST Act w.r.t. disallowance when payment to SMEs is not made within 180 days. Hence, in case a taxpayer does not pay an SME within 180 days, then the expense may be added back to his income.

It is also expected that New manufacturing domestic companies commencing manufacture after 1st April 2024 may be allowed to avail of the scheme for reduced tax rates of 15% Tax on income of new manufacturing under Section 115BAB.

In Income Tax, not only the tax itself, but the compliance burden also creates additional cost for the taxpayers. These may be relaxed in this budget 2024. For example, the age-old requirement to issue and maintain tax deducted at source (‘TDS’) and Tax collected (‘TCS’) certificates is outdated, and not in sync with current times where Form 26AS and AIS/TIS is already available. This requirement may be removed.

Introducing faceless assessment has advantages, but manual tax assessment by JAOs can be beneficial in cases needing a personalized, localized approach or involving complex businesses. Hence it was recommended before the Ministry of FInance to consider setting conditions where taxpayers can opt for JAO assessment (e.g. large taxpayers exceeding a prescribed revenue threshold), balancing the efficiency of faceless assessment with the need for personalized assessments in certain cases.”

Mr. Arun Poddar, CEO and Executive Director, Choice International Limited.

As we anticipate the Budget 2024, we expect measures that will further propel India’s economic growth trajectory. We look forward to initiatives that will bolster the financial ecosystem, including banking, insurance, and capital markets. These sectors are the backbone of our economy, facilitating capital flow and risk management. We hope to see policies that enhance market depth, promote wider participation, and encourage technological innovation in financial services. Additionally, we anticipate a continued focus on disinvestment and an expansion of the Production Linked Incentive (PLI) scheme to include more sectors, providing further impetus to the manufacturing sector.

Key economic priorities should include infrastructure development, job creation, and attracting foreign investments. These steps will be vital in maintaining India’s position as one of the fastest-growing major economies. We also look forward to reforms that will simplify regulations and ease of doing business, particularly in the financial sector, to boost investor confidence and market stability. Lastly, potential adjustments to the tax structure for lower-income brackets could stimulate consumer spending and drive economic momentum, further reinforcing India’s growth narrative.”

Mr. Kamal Khetan, Chairman & Managing Director, Sunteck Realty ltd.

“To benefit home buyers, the Government of India should consider lowering GST rates to increase demand for under-construction developments. Additionally, reintroducing Input Credits would help developers reduce the tax burden and in turn benefit the customers, which further would also ensure a good supply of residential developments.   The sector is also hopeful that the long-awaited proposal for the digitization of land property records and implementation of a unique land identification number will be passed. These measures are seen as crucial for improving transparency and efficiency in real estate transactions.”

Mr. Amarendran Vummidi, Managing Partner, Vummidi Bangaru Jewellers

“The jewellery industry, a keystone of India’s economy, eagerly anticipates the upcoming budget. With gold exports being a significant contributor to the country’s revenue, we seek favorable government policies to enhance growth and sustainability. We look forward to incentives on gold jewellery exports to maintain its competitive edge. The industry also hopes for policies that will ensure affordable interest rates, enabling them to maintain liquidity and manage cash flows effectively. These measures will also be beneficial to create new jobs.”

 Mr Manish Aggarwal, Founder & CEO, E-Revbay Private Limited.

FINTECH

“The upcoming budget presents a significant opportunity for the fintech industry. We hope the government will incentivize start-ups through regulatory reforms that simplify complex compliances and enhance the ease of doing business. Additionally, customer-focused regulatory policies are needed to make it easier for small business owners and self-employed customers to access credit. One critical measure would be simplifying the process for Indian startups to access international funds. We also advocate for large-scale policy reforms, including the formation of policy advisory and oversight bodies with equal representation from the BFSI industry. Furthermore, intermediaries like Direct Selling Agents should have easier access to capital and policies that protect their interests.”

 PERSONAL FINANCE

“As the personal finance landscape evolves rapidly, our expectations from the upcoming budget are centered on sensible taxation and investment policies that benefit individual investors. With more people gaining financial access and opportunities, streamlined compliances and lower tax evasion can lead to higher disposable income for individuals. Investment policies should reward market investments and wealth creation rather than penalizing them. We hope the budget will reflect these priorities to foster a more financially inclusive and prosperous society.”

 BFSI

“Businesses always remain optimistic when it comes to policy. We hope the upcoming budget will protect the lakhs of people working in the BFSI distribution industry from fraudulent practices and formulate policies that safeguard intermediaries from unscrupulous players in the value chain. Additionally, we urge the government to ensure that crores of customers find it easier to access credit and business growth funds when they need them. Such measures will significantly contribute to the stability and growth of the sector.”

 LOANS

“Loans, whether personal, car, or home, are essential for many individuals. We foresee that changes in monetary policy by the RBI could significantly enhance access to easier credit. For customers with good credit history, simplifying the loan approval process is crucial. While short-term loans and credit cards are now easily accessible digitally, there is a pressing need to simplify the processes for home and car loans to ensure broader and easier access.”

Mr Ratish Pandey, Founder and Business Coach, Ethique Advisory.

“Given the slightly lower majority in the recent national elections, I anticipate that the current government will prioritize policies that support the masses. The upcoming Budget, in my view, will likely focus on continued support for infrastructure projects and the agricultural sector.

 With inflation under control, the Reserve Bank might adjust fiscal policy and interest rates. However, funding challenges remain prevalent in the start-up sector. The MSME sector, which contributes a healthy 30% to the national GDP, continues to face significant headwinds, especially in retail. In my daily interactions with MSME entrepreneurs, I observe two primary challenges: cash flow and ease of doing business.

 It would be beneficial if the upcoming Union Budget includes provisions to encourage improved IT infrastructure for MSMEs—perhaps offering “one-off” expense relief for IT hardware and software investments. This would enable MSMEs to utilize new tech tools like CRM, AI, and effective supply chain systems.

 On the ease of doing business front, improvements to GSTN systems, integration of e-invoicing and e-way bills, as well as the provision of softer loans or fiscal reliefs under income tax for investments in building plants and machinery, should be considered. Lastly, greater clarity on the policy regarding 45-day credit payouts to registered MSMEs would be a welcome step”