On July 23, Finance Minister Nirmala Sitharaman is set to present her seventh budget, marking the first full budget of Prime Minister Narendra Modi’s third term. This budget aims to set the foundation for India’s journey towards becoming a developed nation (Viksit Bharat) by 2047.
In February, Sitharaman delivered an interim budget for the 2024-25 fiscal year in anticipation of the upcoming Lok Sabha elections. As part of the comprehensive budget preparation process, she held consultations with a variety of stakeholders, including industry leaders and representatives from the social sector. These discussions underscored the need for measures to provide tax relief, stimulate consumption, curb inflation, and accelerate economic growth.
The 2024-25 budget will be a crucial economic document for the Modi 3.0 government, charting a course for India’s development over the next two decades. Last month, President Droupadi Murmu, in her address to a joint session of Parliament, emphasized the significance of this budget, stating,“This budget will be an effective document of the government’s far-reaching policies and futuristic vision.”
The budgetary consultations included over 120 invitees from 10 stakeholder groups, encompassing experts and representatives from farmer associations, trade unions, the education and health sectors, MSMEs, trade and services, industry, financial sectors, and infrastructure, energy, and urban sectors.
What does the industry have to say for it?
Jayesh H, Co-founder of Juris Corp Advocates and Solicitors, expressed hopes for a reconsideration of the taxation of market-linked debentures. ” “Hoping that the taxation of market-linked debentures is rethought. They have killed a good product (which was helping in the growth of bond markets) in their wanting to plug tax loopholes,” he said. Jayesh also suggested a comprehensive redesign of capital gains taxation across various financial assets and a reevaluation of the definition of Virtual Digital Assets, urging the government not to hinder the use of blockchain technology in mainstream financial markets.
Mahesh Krishnamoorthy, Managing Director of Core Integra, voiced the expectations of the salaried class, stating, “The salaried class has always kept high expectations from the budget, but the last few budgets have been quite disappointing in terms of opportunities to optimize tax and potential for long term savings with higher returns. Few asks could include raising the basic exemption slab to at least 5 lacs and simplifying the tax rates to 10%, 20% and maximum 30% along with eliminating the surcharge and cess. Sec. 80C limits could be enhanced to at least 3 lacs from the current 1.5 lacs. Interest limits on housing loans and principal repayments could be enhanced further. Income Tax Returns could be simplified for Employees who have no other source of income other than salary, the submission by Employer along with TDS as applicable must be considered as auto filing of returns.” He recommended raising the basic exemption slab, simplifying tax rates, enhancing Section 80C limits, and further increasing the interest limits on housing loans and principal repayments.
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Krishna Prasad Chigurupati, Chairman and Managing Director of Granules India, highlighted the need for increased investment in the pharmaceutical industry. He called for government incentives for cutting-edge drug research and development, streamlined regulations for faster approval of new treatments, and a focus on maintaining high-quality drug standards to boost export earnings. “The pharmaceutical industry needs more investment, and the government must incentivize and fund cutting-edge drug research and development. Streamlining regulations to speed up approvals for new treatments and investing in educating a workforce skilled in pharmaceutical innovation are crucial. Simultaneously, authorities need to weed out players that don’t conform to high-quality drug standards accepted globally, to become more credible and contribute to export earnings. These efforts will usher in a new era of Indian pharmaceutical leadership, characterized by path-breaking outcomes. The industry can then be part of India’s ambitious Viksit Bharat journey,” he said. Chigurupati also urged the government to pursue ambitious renewable energy and green hydrogen projects.
Apurve Mehra, CEO of Biogetica, emphasized the importance of expanding the Ayush-based healthcare sector. “We commend the government’s commitment to advancing quality healthcare in India and are confident that the continued reforms and policies will bolster innovation and enhance regulatory efficiency. The government should focus on expanding the Ayush-based healthcare and wellness sector, which is projected to reach $70 billion by next year. As we stand at a critical juncture, the right support and guidance from the government are essential to leading a transformative impact on holistic health practices in India. We urge the Government and Finance Minister to introduce a special package to bolster the Ayush sector in the upcoming budget. This will significantly improve Ayush infrastructure, research, and accessibility. Additionally, we hope Ayush products will receive subsidies and that incentives will be provided to support Ayush companies & startups.” he said, calling for subsidies and incentives to support Ayush companies and startups.
Ashok Rajpal, Managing Director of Ambrane India, expressed optimism for the electronics industry. He praised the government’s Production-Linked Incentive (PLI) schemes and anticipated continued support in the upcoming budget. “For the Union Budget 2024-25, there is a strong sense of optimism within the electronics industry. The Government’s Production-Linked Incentive (PLI) schemes have already demonstrated their potential, driving remarkable growth, attracting investments, and enhancing our manufacturing capabilities. We anticipate continued support in the upcoming budget. To elevate our industry to global standards, it is imperative to enhance support for exporting ‘Made in India’ products. As the budget approaches, we look forward to policies that reinforce domestic manufacturing, foster innovation, and enhance our global competitiveness. Sustained backing for the ‘Make in India’ initiative remains crucial to our trajectory,” he said, advocating for critical investments in infrastructure and technology, tax incentives, and streamlined regulatory processes.
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