NE BUSINESS BUREAU
NEW DELHI/CHENNAI/MUMBAI/GANDHINAGAR, FEB 1
Union Finance Minister Nirmala Sitharaman announced on Thursday the government’s upcoming scheme aimed at assisting deserving sections of the middle class, youth, poor, women and farmers.
The decision to maintain current tax rates for direct and indirect taxes, including import duties, will provide a much-needed sense of stability for businesses and investors. Overall, this is a positive budget for the markets, with continued focus on growth, prudence and transparency, say industry captains.
Excerpts:
Ashishkumar Chauhan, MD & CEO, NSE said: “I give the Interim Budget 10/10. The budget focuses on growth, welfarism and fiscal restraint, while ensuring continuity on policies and taxation. The focus on capacity building through higher spending on hard as well as soft infrastructure and consequently facilitating job creation has continued. At the same time, the budget provides enough for poor, farmers, women, and youth, which in turn bodes well for the overall economic growth, thereby keeping us in a good stead in an otherwise uncertain world. At 5.8%, the revised fiscal deficit for FY23-24 is an improvement from the budget estimate by 10bps. Fiscal consolidation continues to be the front and centre, with the fiscal deficit for FY24-25 brought down to 5.1%, bettering expectations and a commitment of a sub-4.5% target by FY25-26.
The capex outlay has increased by 16.9% to a record high of Rs 11.11 lakh crore, implying 3.4% of GDP—the highest in 26 years, with strong focus on roads, transport, and railways. This implies a CAGR of 27% in the last five-year period. The quality of expenditure has also improved, with capital expenditure now comprising 23.3% of total expenditure—the highest in 30 years.
It is a Holistic Budget exemplifying fiscal prudence
Niraj Kumar, Chief Investment Officer, Future Generali India Life Insurance Company Ltd. said: “Budget 2024 is a Holistic Budget exemplifying fiscal prudence and encompassing all the imperative sectors despite electoral compulsions. This budget gives credence to government’s unwavering resolve to adhere to the fiscal consolidation glide path, especially after having delivered robust growth-oriented budget in the last 3 years. The vision under Vikasit Bharat by 2047 and top 4 priorities laid out with respect to empowering Poor, Women, Youth and Farmers will go a long way in manifesting the long- term growth story of India. It is high on optics, low on spending impact as fiscal consolidation remains its paramount focus. The key announcements on power sector coupled with new energy, railways, defense, affordable housing is indeed encouraging. While optically 11% capex growth seems lower than 30% avg growth seen in the last 3 years, but it yet sticks to 3.4% of GDP, which is indeed credible as it would continue to give the requisite infra led push to sustain the growth momentum. Clearly the budget lacks any consumption and populus measures and is thus a departure from the previous pre-election Vote on Accounts.”
The emphasis on crop insurance is crucial, providing a safety net for 4 cr farmers
Sharad Mathur, Managing Director & Chief Executive Officer, Universal Sompo General Insurance Company Ltd. said: “Ensuring the welfare of our Farmers is central to our commitment. The budget’s focus on farmers, especially through PM-KISAN SAMMAN Yojana and PM Fasal Bima Yojana, aligns with our dedication. The emphasis on crop insurance is crucial, providing a safety net for 4 crore farmers. The commitment to infrastructure development, including support for EV manufacturing, signifies a proactive approach towards sustainable practices. This aligns with global trends and reinforces our commitment to contributing to the nation’s progress.The broader sectoral vision resonates with our goals for inclusive, balanced, and robust growth. Farmer-centric policies, income support, and innovative risk coverage through insurance are pivotal for higher productivity. We applaud the commitment to promoting technologies and innovations, recognizing the role of start-ups in shaping agriculture’s future.”
Massive tripling of capital expenditure on infrastructure development will boost insurance sector
Amit Agarwal, CEO, Howden Insurance Brokers (India), said: “We commend the massive tripling of capital expenditure on infrastructure development in the past 4 years, resulting in a huge multiplier impact on economic growth and employment creation. The outlay for the next year is being increased by 11.1 percent, which amounts to Rs 11.11 lakh crore, announced the FM. This is 3.4 percent of the GDP. It is noteworthy that the International Monetary Fund (IMF) raised India’s FY25 GDP growth forecast to 6.5%. Substantial investment in infrastructure presents a significant opportunity for the insurance market to expand, as it plays a crucial role in mitigating the risks associated with large-scale projects. The IMF’s revised growth forecast for India and its projected economic trajectory underscore the importance of robust risk management strategies, which the insurance sector is well-equipped to provide.”
Low interest financing for sunrise sector is going to be a gamechanger
⇐Anuj Parekh, Co-founder and CEO at Bharatsure,said: “The government’s announcement for a Rs. 1 lakh crore corpus of low interest financing for sunrise sector is going to be a gamechanger for new innovation and development.
This will indirectly benefit start-ups who have faced challenges over the last few years to secure financing. Looking forward for more details on these initiatives.”
Budget focusses on tourism with multipronged approach
Madhavan Menon, Executive Chairman, Thomas Cook (India) Limited, said: Madhavan Menon, Executive Chairman, Thomas Cook (India) Limited said “The interim Budget presented by the Finance Minister has focussed on Tourism with a multipronged approach that we believe will create a multiplier effect across aviation, tourism and allied sectors, boosting growth and employment generation. We welcome the announcements on airport development and expansion: having already doubled to 149 airports in the last decade, the government’s plans to boost air connectivity by the addition of 517 new routes across Tier 2-3 cities, carrying 1.3 crore passengers via the UDAN scheme, will play a critical role with vibrant hub and spoke air corridors to boost accessibility-affordability for Regional India.”
It gives room for private capital investment into the growth of India
Sundararaman Ramamurthy, MD & CEO, BSE, said: “This Interim Budget the honorable Finance Minister has once again delivered a responsible, innovative and inclusive budget. This budget lays emphasis on Fiscal products and gives room for private capital investment into the growth of India. Continuing with the trends of the last 10 years, the FM once again lays on the foundation for a very strong path for India with due focus on areas of national importance.”
Extension of tax exemptions decision is timely
Tapan Ray, MD and Group CEO, GIFT City said: “The Union Government’s commitment to GIFT IFSC’s comprehensive development is commendable, evident in Finance Minister Smt. Nirmala Sitharaman’s interim budget. Recognizing the crucial role of GIFT City as a global financial gateway, the decision to extend tax exemptions on specific IFSC unit income, reflects a forward-looking approach. GIFT IFSC welcomes this move, crucial for sustaining ease of doing business and ensuring stability in taxation. This decision aligns with our shared vision for fostering a thriving IFSC ecosystem, contributing to India’s economic prowess. We appreciate the government’s continued support, emphasizing GIFT IFSC’s pivotal role in the global financial landscape.”
Real estate body welcomes budget measures, says it will boost confidence
G Hari Babu, National President of NAREDCO, said, “We commend the government’s visionary approach in crafting a comprehensive roadmap for Vikasit Bharat, emphasizing governance, development, and performance. This budget perfectly aligns with our vision of fostering a progressive and inclusive India. The government’s commitment to housing development through the Pradhan Mantri Awas Yojana – Gramin is laudable, with the announcement of 2 crore additional houses reflecting a dedicated effort to improve citizens’ lives and address rural housing challenges. Further, the reiteration of a new scheme for the urban middle class population, also would boost confidence of both the common man and the real estate sector. We now look forward for a clear roadmap of this scheme. Thes proactive steps underscores the government’s unwavering commitment to holistic development and the welfare of our people. The announcement in the budget regarding the withdrawal of pending income tax demands, particularly for amounts up to ₹25,000 for the period up to the financial year 2009-10 and up to ₹10,000 for financial years 2010-11 to 2014-15, is a welcome move. This decision, benefiting a crore taxpayers, demonstrates the government’s commitment for easing financial burdens and prioritizing the welfare of our citizens.”
Focus on reinforcing the affordable housing sector through the increased allocation for PMAY
Mr. Ashwin Sheth, Chairman, Ashwin Sheth Group, said: “We acknowledge the strategic direction outlined in the 2024 interim budget, particularly its focus on reinforcing the affordable housing sector through the increased allocation for the Pradhan Mantri Awas Yojana (PMAY). This puts a spotlight on the government’s unwavering commitment to encouraging inclusive real estate development, acknowledging the key role of affordability in comprehensively addressing housing needs. The allocation of 70% of PMAY houses to women in rural areas is of special significance and will go a long way towards providing secure living spaces and advancing women empowerment. The progress in the implementation of PM Awas Yojana (Grameen), approaching the target of three crore houses, with a commitment to taking up construction of two crore additional houses over the next five years, reflects the government’s dedication to meet the growing demand for housing in rural areas.
Maintaining a delicate balance between promoting affordable housing and ensuring sustained growth across all segments is crucial, and will no doubt foster an environment conducive to growth, investment, and the holistic development of the real estate ecosystem.
Moreover, the increased outlay for infrastructure to Rs 11.11 lakh crores in FY25, is a welcome move, giving further support for overall growth and development in the sector. Building on these developments, we look forward to continuing to help develop a robust and inclusive real estate landscape in India.”
Financing technological research corpus will benefit for startups
Lt. Gen. AK Bhatt, Director General, Indian Space Association said: “We commend the government’s allocation of the ₹1 lakh crore corpus in the interim budget 2024 for long-term financing of technological research. This move will be beneficial for startups in the rapidly expanding space sector, providing them with support to innovate and conduct further research across various domains of space technology.
“Additionally, the new scheme being launched for boosting deep-tech for the defense sector will be transformative. This initiative holds significant promise for DefSpace startups, which can play a substantial role in enhancing the ecosystem due to the integral relationship between space and defense industries.
“However, we are sanguine that the post-election full budget will include support for a liberal FDI policy for space, inclusion of space grade components in PLI, reduction of GST for satellites, launch vehicles and ground equipment manufacturing and provide tax holidays and lower import duty for space sector firms.”
Characterized by stability rather than significant upheaval, serving as an interim measure
Dr Saundarya Rajesh, Founder – President, Avtar Group, said: “The tabled interim Budget has set the tone for the next phase of growth and development of the nation. By way of acknowledging the importance of inclusivity and equal opportunities for all, the government is reiterating the potential that increased women’s workforce participation will contribute to overall GDP of the nation. The continuous allowances to entrepreneurship for women and youth, skilling or simply put towards the GYAN (Garib, Yuva, Annadatha and Nari) Bharath do promise growth and stability for the country. However, MSMEs and Start-ups – the key sectors that have the potential to boost women’s workforce participation, have not seen much push in the last two years, particularly by way of tax rebate in SEZs for companies operating in the STEM industry. While 43% of STEM graduates are women, they make up only 28% of the workforce in STEM. Moreover, women drop out of the workplace due to childbirth, childcare and elder care. Consequently, only 3 percent of women hold CEO posts in the STEM Industry. To fast-track the growth, the new government will have to usher initiatives and policy measures such as incentivizing targeted women-talent hiring and retention especially in the MSMEs and Start-ups sectors that will provide the much-required fillip towards women’s workforce participation.”
Welcome ‘Housing for All” scheme
Mr. Suresh Mutha, Managing Director at M20 Urban Spaces, said: “It is great to hear that our economy is doing well, there is macro-economic stability, including in the external sector and that investments are robust. The mention of the geographical inclusivity through development of all regions of the country is great news for the real estate sector. The ‘housing for all’ scheme has already won the hearts of many in the country and I hope the scheme is continued in all good spirits. I welcome the scheme to help deserving sections of the middle class living in rented houses, or slums, or chawls and unauthorized colonies to buy or build their own houses. We stand with the country in building a modern infrastructure. Positioning India as an attractive destination for business and conference tourism is a great move which would give huge financial benefits. Promoting iconic tourist centres in the country will create more jobs, as well.”
Empowering and encouraging youth & women will act as a catalyst to the country’s GDP
Anil Jain, MD, Refex Group said: “We are very happy with Interim Budget 2024-2025 as there is a lot of focus given to green and sustainable energy to promote Blue Economy 2.0. The government’s initiative to offer 1 cr households with solar rooftops is a step in the right direction. Their move of empowering and encouraging youth and women will act as a catalyst to the country’s GDP. To boost research and innovation in emerging sectors, various schemes will add value and enable accelerated growth for the overall economy and growth. This interim budget will open many avenues for all sectors while also ensuring every citizen’s development.”
Budget 2024-2025 has been positive for Agritech and AgriFintech companies
Joby CO, CEO & Co-founder, KiVi, said: “The Interim Budget 2024-2025 has been positive for Agritech and AgriFintech companies. Under the various schemes for the ‘Garib’ and ‘Annadata’, many farmers belonging to small and marginal categories will be happy to receive financial assistance. The focus on Electronic National Agricultural Market and technology provisions made for mandis will benefit companies many Agri-fintech companies. The budget has also quoted value addition in the agricultural sector which will come in as a boon to farmers wherein schemes like PM Formalization of Micro Food Processing Enterprises Yojana will ensure reduction in post-harvest losses. Bringing in public-private investments in post-harvest activities such as aggregation, storage, supply chains, processing, marketing and branding of the yield will promote growth, productivity and improve farmer incomes.”
Budget pivoted around governance, development, and performance
Shanti Ekambaram – Whole-time Director, Kotak Mahindra Bank, said: “The Budget pivoted around governance, development, and performance. There was continued focus on outlay for financial inclusion, Infrastructure spends, path to fiscal consolidation of 4.5% by FY’26 and bring focus to innovation by allocating 1 lakh crs to “Sunrise Industries” through interest free loans to the private sector. The focus on sustained infrastructure spending, up by 11.1% to Rs 11 lakh crore, containing fiscal deficit to 5.1% of the GDP. The FM’s look-back in which she took us through the broader socio-economic development that we have achieved in the last decade seems very impressive; the focus on building all forms of infrastructure, physical, digital or social, in record time and creating an inclusive economy in which everyone is becoming an active participant are steps in the direction of India becoming a developed nation sooner than 2047. Overall the FM’s “vote on account budget” provided a futuristic vision to a 7 Trillion economy and growth path”
The finance minister has rightly chose the path of fiscal consolidation
⇐ KVS Manian, Whole Time Director, Kotak Mahindra Bank on the Interim Budget, said: “The finance minister has rightly chosen the path of fiscal consolidation. The aim to bring the fiscal deficit down to 5.1% of GDP for FY25 is lower than general expectations of 5.2-5.4% and that is very heartening. The minister is showing strong intentions, ahead of the election year, to adhere to the fiscal consolidation path will be well received by rating agencies as well as the global investors that are eyeing India as an attractive investment destination.”
Budget conveys a message of continuity and ensures no negative surprises
