Union Budget 2024: India’s Financial Blueprint To Foster Comprehensive Focus On Growth

Indian democracy witnessed a watershed moment at the Union Budget 2024-25, as policymakers focused on nine key areas to deliver a comprehensive growth roadmap through strategic allocations. Employment & upskilling, Infrastructure, Innovation & Research and development, and taxation reforms among others dominated GOI’s financial blueprint for the rest of the fiscal year. This marked a critical point for India’s holistic growth across sectors, as numerous corporates celebrated the focused push in different directions.

The GOI maintained its support to businesses operating in the startup, infrastructure development and EdTech sectors. Finance Minister Nirmala Sitharaman called for abolishing the Angel Tax, a milestone for the private entities. Apart from streamlining taxation, announcements regarding new infrastructure projects and upskilling youth set the tone for the budget. 

A provision of INR 1.48 lakh crore was allocated for education, employment and upskilling, coupled with the announcement of loans up to INR 10 lakh for higher education. The centre also announced up to 5 schemes to strategically push the employment rate with an INR 2 lakh crore package, consisting of initiatives that facilitate employment and upskilling of over 4.1 crore youth in the next 5 years. Additionally, the Indian manufacturing industry received a much-needed boost through the incentivization of job creation in the industry. Also, the announcement of key road connectivity projects, along with bridges and airports offered a bright future outlook for the construction sector. Furthermore, the abolition of the Angel Tax and streamlining corporate taxation for foreign companies to increase FDI inflow and growing emphasis on digitization highlights India’s strategic blueprint for the rest of the FY.

Organisations operating in these sectors — Euro Panel Products Limited, GUVI, QuackQuack and Xyst Care hailed the forward-thinking growth roadmap in the budget, as these entities became direct beneficiaries of the government’s commitment to supplement national growth. 

Focus on upskilling in a comprehensive budget

* Mr. Arun Prakash, CEO and Founder of GUVI, lauded the centre’s focus on employment and upskilling, along with abolishing Angel Tax in the Union Budget, saying, “The financial blueprint laid out in the Union Budget puts a special emphasis on upskilling programmes targeting Indian youth. Furthermore, the package of five schemes designed to facilitate employment and upskilling with a strategic allocation of INR 2 lakh crore will have long-term favourable impact on the future of countless Indian students and professionals alike. While budgetary initiatives are focusing on upskilling 20 lakh youth directly in the next 5 years in trending and relevant, industry-appropriate courses, the long-term implications of this will be immense. Also, the abolition of Angel Tax will help the overall EdTech sector significantly through a unique opportunity to ensure scalability and growth, and attract investments simultaneously.”

Growth-oriented Infrastructure development push 

* Mr. Divyam Shah, Director of Euro Panel Products Limited, feels the government’s continued push on developing and revitalising infrastructure projects will assist the overall construction sector to ensure growth, “The centre’s renewed interest in maintaining its focus on infrastructure development in the Union Budget is a gratifying sight. The construction of several key road connectivity projects, including highways and others, along with a new airport in Bihar and across India aligns with Eurobond’s long-term objectives. Furthermore, the incentivization of job creation in the manufacturing sector will help the sector to generate more jobs for skilled professionals, helping to streamline and increase the efficiency of the manufacturing process, leading to future growth.”

Streamlining taxation significant boost for startups

* Mr. Ravi Mittal, Founder & CEO of QuackQuack, feels abolishing Angel Tax will have favourable long-term implications for the Indian startup ecosystem, “This 2024-25 Union Budget is highly influential to ensure long-term success in the startup ecosystem. By doing away with the Angel Tax, startups have been enabled to encourage a renewed business approach and enhance valuation. This will enable startups to undertake expansion initiatives without concerns about taxation, while also attracting increased funding from angel investors. Furthermore, the centre’s emphasis on upskilling will provide a viable pipeline of trained professionals for startups, ensuring long-term growth and scalability. “

* Ms Gunjan Agarwal, Co-founder of XYST Care, states , “Abolishing Angel Tax will have a long-term impact on startup founders. This will not only motivate angel investors, but help to encourage entrepreneurial spirit in the Indian business domain. Additionally, the job generation push, coupled with the government’s financial assistance will help startups to acquire more talented professionals, leading to cumulative growth in the long-term. This Union Budget is full of opportunities for Indian startups pushing to become the next Unicorn, and governmental assistance is bolstering it to ensure success and growth.

The latest budget stresses ‘Viksit Bharat’ yet again, promoting a strategic push in key sectors to usher in economic growth and viability to supplement India’s bid to become a developed nation by 2047. Optimization of resources to address key concerns in upskilling, employment, agriculture and technology holds the potential to lead to a promising future and assist the nation to become a $5 trillion by 2027, as projected by the Ministry of Finance. The comprehensive union budget also seeks to provide uniformity in growth across sectors, helping to facilitate a new chapter in India’s progressive trajectory.

* Mr. Madhavan Menon, Executive Chairman, Thomas Cook (India) Limited (Thomas Cook, SOTC, Sterling Holidays and TCI) says that this year’s Union Budget has opened new doors to development, specifically for domestic and inbound tourism. With the focus on special development funds/ programs for the socio-cultural-religious potential of iconic temple corridors including Gaya’s Vishnupad & Mahabodhi temples into world-class pilgrim and tourist destinations (to be modelled on the success of the Kashi Vishwanath temple corridor), the Government of India’s intent is encouraging. Additionally, the comprehensive development of the Rajgir Jain Temple site; rejuvenation of the historical gem of Nalanda & Nalanda University into a major religious-tourist centre, would have a multi-pronged impact. While positioning India as a vibrant global tourism destination, it will also accelerate job creation and economic opportunities for allied sectors.

The Budget also appreciated the underleveraged potential of Odisha's tourism industry by supporting the state’s rich heritage-history, spirituality, craftsmanship and natural beauty.

Recognizing the high potential domestic cruise segment, the Union Budget announcement proposed a simpler tax regime to support/incentivize foreign cruise companies operating in India’s waters.

We’re optimistic about the significant allocation of INR 11.11 lakh crore (constituting 3.4% of India's GDP) towards infrastructure development. The development of road, rail, air, and waterways will ensure a boost to access/connectivity and affordability, and force multiplier benefits for tourism and allied sectors.

When introduced, TCS was considered disadvantageous to salaried employees as their cash flows were negatively impacted. Post the Budget announcement, salaried employees can now avail of immediate credit of TCS paid on account of their foreign travel - against TDS on salary, enhancing the purchasing power of Indian consumers.

The discontinued SEIS scheme should have been reinstated, as this is meaningful towards encouraging inbound tourism, foreign exchange receipts and a force multiplier for employment generation.

We are disappointed to note that key pillars in India’s Tourism agenda - Aviation & Hospitality were not mentioned as part of the Budget and both standardisation of GST rates on hotel tariffs to 12% and the reduction of ATF remained unaddressed.

* Sanjeev Dasgupta, CEO, CapitaLand Investment India says that the government’s commitment to establish 'plug and play' industrial parks and 'Cities as Growth Hubs' will unlock significant investment opportunities and drive demand for modern commercial spaces in the country. With added benefits, this move will also incentivize global firms to strengthen their manufacturing hubs in India.

Additionally, the proposed ‘Transit Oriented Development’ will be a promising step towards decongesting cities, and creating a vibrant landscape for investment. Faster implementation, with a focus on regions such as Bangalore, Mumbai and NCR will be imperative to sustain and accelerate the pace of industrial development and new workforce integration."

* Vidita Kochar, Co founder at Jewelbox; The recent reduction of customs duty on gold to 6% marks a significant advancement for the jewellery industry, enhancing its competitiveness and making it more accessible to consumers. This move aligns seamlessly with our commitment to providing high-quality, affordable lab diamond jewellery to our customers.

Additionally, the abolition of the angel tax is a laudable initiative that will invigorate India’s startup ecosystem. This change is poised to spur innovation, attract global investors, and provide a substantial boost to startups.

We are confident that these measures will significantly contribute to the growth and dynamism of both the jewellery sector and the broader startup community in India.

* On start-ups, MSMEs, and the manufacturing sector from Mr. Rahul Garg, CEO & Founder of Moglix says, "The removal of angel tax is a welcome move for India's startup ecosystem. This, coupled with the establishment of a Rs 1,000 crore VC fund for the space economy, will foster innovation. The budget’s focus on manufacturing, with the introduction of plug-and-play industrial parks, is progressive. MSMEs will benefit significantly from the credit guarantee scheme, new assessment models by PSU banks, and increased Mudra loan limits. The substantial allocation of Rs 11 lakh crore for infrastructure especially nature resilient is crucial for building a Viksit Bharat. The strategic shift towards nuclear energy as a major power source is visionary. Finally, the emphasis on cultural heritage through the development of the Vishnupad, Mahabodhi temple corridors, Rajgir, and Nalanda is a welcome addition. 

* Deepak Chand Thakur, Co-founder and CEO of NPST Ltd says, "We welcome the Union Budget. Although it does not contain direct policy mandates for the Fintech segment, there are several positives that we would like to highlight:"

Income Tax Relief and Increased Discretionary Income: The relief in income tax is expected to boost consumer spending, which in turn will drive more digital transactions.

5G Market Growth and Smartphone Penetration: In a rapidly growing 5G market, improved smartphone penetration is essential for broadening payments. The Budget's focus on reducing the cost of imported components and finished products, potentially leading to lower retail prices for mobile phones and accessories, will benefit the fintech sector by expanding the base of smartphone users and enhancing access to digital payment platforms.

Reduction in E-commerce TDS: The reduction in e-commerce TDS from 1% to 0.1% will encourage more merchants to embrace digital payments. This policy change will lower the compliance burden on merchants, making it easier for them to participate in the digital economy, thus driving further adoption of digital payment systems.

E-commerce Hubs and Public-Private Partnerships: The establishment of dedicated e-commerce hubs through public-private partnerships presents an exciting opportunity for innovation in cross-border B2B trade payments, potentially using UPI rails.

Expansion of IPPB Branches in the Northeast: The opening of 100 IPPB branches in the Northeast also opens opportunities for other payment companies and fintechs to expand their services to new regions, tapping into a market with significant growth potential.