Union Budget 2024-2025 Expectations

17th July 2024- In anticipation of the Union Budget presentation on July 23, Prime Minister Narendra Modi held a meeting with leading economists to discuss economic strategies. Union Finance Minister Nirmala Sitharaman is set to present the budget for the fiscal year 2024-2025. Economists have suggested tax relief measures to boost consumer spending, along with strategies to tackle inflation and stimulate economic growth. Expected proposals include tax cuts to increase consumption, increased subsidies for rural housing, an expansion of the Production-Linked Incentive (PLI) scheme, special assistance to states, and enhanced healthcare coverage. With an assumed 11% nominal GDP growth rate for FY25, potential changes in capital gains taxes are under consideration. Discussions include raising short-term capital gains (STCG) tax rates from 15% and adjusting long-term capital gains (LTCG) tax on equities by either extending the holding period to qualify for long-term capital from 12 months to two or three years or increasing the tax rate from 10% to 15%, which could affect the stock market.

Comments From industry experts 

Dr. Miniya Chatterji, Founding Director, Anant School for Climate Action, and CEO, Sustain Labs Paris

“In the Union Budget 2024, it would be important to prioritize initiatives that drive sustainable growth. Investments should focus on renewable energy projects, green infrastructure, and sustainable agriculture. Another good move could be a reduction in the GST levied on renewable energy components. Additionally, provisions should be made to promote skilling and innovation in the field of sustainability”.

Mr. Kumar Ritesh, Founder CEO, Cyfirma

“I am looking forward to seeing how the upcoming budget addresses the nation’s urgent cybersecurity needs amidst rapid digital transformation. India needs significant investment in building a national cybersecurity framework for enterprises, SMEs and startups to ensure all businesses have access to essential resources and guidelines.
Supporting this, there is a critical need for adequate funding for a robust incident reporting policy, as that would facilitate timely and transparent reporting of cyber incidents, allowing minimising the damage and help in building a resilient cybersecurity infrastructure. For all these, the budget should include co-innovation funding for cybersecurity startups that would facilitate the development of new security solutions. By doing so, India can accelerate the development and deployment of advanced cybersecurity technologies. It is crucial that the government take initiatives to integrate cybersecurity startups into federal and enterprise sectors. As collaborating with the government and cybersecurity firms can help these startups scale their solutions, offering larger entities innovative and agile security approaches. These collaborations can combine expertise and resources to advance cybersecurity measures and bolster defence against cyber threats. And finally the Budget should prioritise funding framework and guidelines to address the AI’s cybersecurity challenges while fostering innovation”

Pankit Desai, CEO & Co-Founder, Sequretek

“Emphasis should be on enhancing national cybersecurity infrastructure by providing dedicated funding for both government and private sector to prevent data breaches and cyberattacks, especially in critical areas such as banking, energy, healthcare, and transportation. This involves investing in cybersecurity education at universities and technical institutions and providing training and certifications courses at subsidised rate to ensure continuous skill development and a robust pipeline of cybersecurity professionals. Investments should also go to protecting critical infrastructure with advanced threat detection and response systems to build resilience and recovery plans to quickly restore services in the event of a cyberattack. For this it is necessary to encourage cybersecurity innovations by providing financial incentives and establishing incubation centres to support growth of new cybersecurity businesses. Along with this, funds should be deployed to raise awareness about cybersecurity practices among businesses and the general public through workshops and seminars in collaboration with industry experts”.

Varun Babbar, Managing Director – India and SAARC, Qlik

As we anticipate the new government under Prime Minister Modi, we expect strong backing for the ‘Viksit Bharat’ initiative—a vision introduced for accelerating the nation’s development and promoting economic inclusivity. This transformation requires placing technology at its core. Prioritizing the adoption of digital technologies across critical sectors, especially governance, will encourage inclusivity and efficiency in delivering social and welfare schemes.

Increased investment in policies that simplify doing business and empower startups and emerging technologies, such as artificial intelligence (AI), is essential. As AI continues transforming sectors like healthcare, finance, manufacturing, and education, implementing proactive measures to ensure its responsible development is crucial.

That said, future AI guidelines should emphasize safety, ethical standards, and societal welfare while fostering innovation. Designing AI with a human-centered approach—emphasizing fairness, transparency, and accountability can address ethical concerns and mitigate risks associated with AI misuse, like deepfake technology and job displacement.These steps are central to driving sustainable growth through data-driven insights and innovation.”

Mr. Pankaj Jathar, CEO of NIIT Ltd.

“As we near Union Budget 2024-2025, we look forward to a substantial increase in budgetary allocation for education and skill development to about 6% of the GDP which will be vital to reach the full potential of NEP 2020. We appreciate the government’s dedication to promoting education and skilling and hope the upcoming budget will build upon these initiatives to create even more opportunities. We anticipate policies that support public-private partnerships, enhancing the reach and impact of our skilling efforts. A focus on sustainable employment opportunities will not only uplift individuals but also drive the economic growth of our nation.”

Mr. Ashish Pradhan – President, Siegwerk Asia

“The packaging industry in India is at a pivotal juncture, experiencing rapid growth and innovation. The robust growth of the packaging sector is supported by the rising demand in FMCG, e-commerce, and sustainable packaging solutions. There is a pressing need for policies that support sustainable packaging solutions, infrastructure development, and technological advancements. We expect the upcoming Union Budget to address critical areas that include the simplification of GST and favourable tax policies, which help keep momentum in this sector high. These measures will not only enhance the industry’s global competitiveness but also drive environmental responsibility and economic growth.”

Sachin Alug, CEO, NLB Services

The interim budget of 2024 highlighted some major initiatives like Pradhan Mantri Kisan Sampada Yojana and Pradhan Mantri Matsya Sampada Yojana. Additionally, funds were allocated for research, innovation, and infrastructure development to stimulate job creation. Similarly, the Union Budget 2024, is going to be a further extension of the interim budget to focus on various aspects including employment generation which will be one of the most crucial aspects anticipated by industry leaders.

The current job market has been experiencing a fluctuation due to global economic changes and technological advancements. With the aim to become USD 7 trillion by 2030, employers and employees have strong hope from the union budget for 2024. We are also hopeful that the budget will focus on investments in human capital, infrastructure, sustainable employment generation, education, and increasing the participation of the women workforce to drive economic growth.

Apart from employment generation, upskilling will be another focus area of the upcoming Union Budget 2024 for the HR sector. We are anticipating an increase in budget allocation for skill development and entrepreneurship by 20-25%. Additionally, the budget is also expected to bridge the gap between industry requirements and the existing talent pool as the existing gap is 15-20% in the tech sector which is hampering both the employers and the employees. Moreover, the sector will look forward to support for structured skilling programs, vocational training, STEM education, and digital upskilling to align the workforce with emerging market demands.

In the education sphere, there would be more incentives and higher allocations in the upcoming Union Budget 2024. This is because of the continuation of National Education Policy 2020 (NEP) and skill training initiatives, the education sector is likely to be a key focus for Finance Minister Nirmala Sitharaman in the upcoming Budget. Additionally, the increased funding for new schools and teacher-training programs are essential to universalize education from preschool to secondary level with a 100% Gross Enrollment Ratio by 2030. Overall, the HR and education sector is expecting the budget to uplift the job market in order to execute its goal of achieving USD 7 trillion by 2030.

Mr. Gaurav Jalan, Founder & CEO, mPokket

“Following from the Interim Budget earlier this year and the challenges of the economy in the recent past, the upcoming full budget is expected to focus on employment, infrastructure and innovation. We expect the government to double down on initiatives relating to upskilling of youth to improve employability. Alongside this, increasing jobs is expected to be the core government agenda. We expect this to be through a dual approach of easing credit access to small and medium businesses to catalyse their growth and through incentives on research and investments from the private sector. We expect the government to also focus on the disposable income of the middle class by revisiting direct taxation rates. This shall drive a sustained domestic consumption-led growth for the economy. Additionally, we believe the government shall continue to view positively the contribution of fintechs as a key driver of easy access to credit and their potential to create employment. We therefore expect a favourable approach to investments in the sector and clarity on the open regulatory discussions to propel India towards becoming a global fintech hub.”

Raja Debnath, Managing Director at Veefin Solutions Ltd.

“Easier access to credit for MSMEs – that, in my opinion, should be a key area in this Union Budget. The lack of credit availability has stood in the way of MSMEs’ growth, and this is the best time to change that. The government must improve MSMEs’ access to finance through higher digital adoption initiatives, and regulatory sandboxes, among others.

In addition, I anticipate that the government will give top priority to financial literacy initiatives, specially designed for MSMEs. By evolving in these areas, MSMEs will gain the skills required to become more efficient. In terms of FinTech advancement, increased support is needed for developing and deploying cutting-edge technologies. These technologies are crucial for creating more efficient, transparent, and secure financial services, driving greater inclusivity and resilience within the sector.

We envision a future where banks can leverage FinTech collaborations and government initiatives to seamlessly bridge credit gaps in underserved sectors. We are optimistic that the budget will demonstrate a strong dedication to supporting financial inclusion, encouraging innovation, and reducing systemic risks. Together, we can jointly strive for the sustainable expansion of the FinTech industry and ensure that MSMEs continue to maintain their crucial role in the economy’s growth.”

Sachin Agrawal, Co-Founder & CEO at Bizongo

“We’re optimistic that the forthcoming budget will support the expansion of the MSME sector. In order to improve access to technology for suppliers in the steel and aluminum sectors, we expect policies like subsidies for digital tools and platforms to help MSMEs with their digital transformation. Such measures are crucial and will enable MSMEs to streamline their operations, increase productivity, and remain competitive in the global market.

Considering the importance that increased credit availability holds, we urge the government to think about raising the 90-day NPA classification guidelines to 180 days in addition to introducing new loan programs designed specifically for MSMEs. Furthermore, the establishment of a dedicated committee with key stakeholders from the government, financial institutions, and the fintech industry will also prove to be a beneficial move, addressing the unique challenges faced by MSMEs and ensuring the implementation of policies that enhance financial inclusion and growth. Overall, access to capital and a thorough evaluation of the current MSME programmes to ensure they meet changing needs should be one of the main priorities of the budget.”

Anand Kumar Bajaj, Founder, MD & CEO, PayNearby

“As we anticipate the Union Budget, the focus on Bharat, India’s rural heartland, takes centre stage. The journey towards a $5 trillion economy hinges on the transformation of these rural areas, driven by groundbreaking financial and digital solutions provided by leading fintech players. A robust tech stack riding on the back of a strong distribution network has opened doors for Bharat to access innovative financial and digital services. Our commitment to making banking, credit, assurance (insurance + asset), and e-commerce services accessible to Bharat is exemplified by the unique infrastructure we have built. However, for these services to reach citizens at the last mile, technology, security, trust, and Government support are crucial.

Towards this purpose, in the Budget 2024, we urge consideration of

1. Tax benefits on total expenditure for fintechs involved in the financial empowerment mission. In light of this, we propose specific measures, including a special 5% GST rate for startups working for last-mile empowerment, facilitating crucial financial and digital services to the citizens. A GST subsidy, even a modest one, would significantly ease the reach of financial services and government benefits, encouraging innovation in the financial empowerment space.

2. We also urge for a waiver of GST on all financial services made available from BC outlets, an Income Tax relief for the next seven years, and reduced import duty on essential financial services devices.

With the majority of PayNearby’s BC network operating in tier II and beyond regions, serving as banking hubs in areas with limited financial infrastructure, this would ensure sustainable growth and motivate more last-mile retail banking agents to offer seamless services everyone, everywhere.”

Pushkar Mukewar, CEO and Co Founder, Drip Capital

“The upcoming budget can support MSMEs through strategic incentives when it comes to emerging technology adoption. We are at the cusp of reaching the ambitious target of USD 2 trillion in exports by 2030. This can’t happen without advancement in digital capabilities and digital public infrastructure. These innovations are needed for productivity, efficiency, and global competitiveness to seize the industry 5.0 prospects. Ambitious government initiatives such as the Trade Connect e-Platform can play a huge role in connecting exporters, MSMEs with the global trade ecosystem.

The significant financing gap of $2.5 trillion calls for innovative solutions to mitigate risks and reduce interest rates through robust credit guarantees. There must be tailor-made financing solutions for startups and MSMEs. Also, alternative financing options such as crowdfunding, invoice discounting, and supply chain financing can provide the much-needed capital. In fact, quick access to finance is imperative for MSMEs to overcome challenges such as delayed payments that impact their liquidity and competitive edge.

Increased government support is essential in accelerated funding for credit schemes, simplification of regulatory frameworks, and initiatives aimed at enhancing the ease of doing business”.

Swarup Bose, Founder & CEO at Celcius Logistics

“At Celcius Logistics, we recognize the transformative potential of government support for the Indian logistics industry. With the country’s current cold chain market size at US$35 billion and expected to reach US$50 billion by 2027, strategic investments are more critical than ever. Prioritizing cutting-edge cold chain warehousing and transportation solutions in the budget is essential. These investments will not only bolster key sectors such as agriculture, food and dairy, processed food, pharmaceuticals, and healthcare, but also help reduce losses and improve the hunger index.

By adopting advanced technologies like automation, AI-powered analytics, and blockchain, alongside a focus on environmentally conscious practices and regulatory compliance, we can enhance productivity, promote sustainability, and build resilience against supply chain disruptions. Furthermore, this strategic support will facilitate the growth of quick commerce, ensuring rapid and efficient delivery of goods. Celcius, in collaboration with the government, is dedicated to ensuring that the allocated resources unlock the full potential of our cold chain infrastructure, driving future efficiency and innovation in the industry.”

Shrinidhi RS, Founder and CEO, CherriLearn

“As we anticipate the upcoming Union Budget, I’m hopeful for significant strides in the education sector. Increased funding for digital education, support for EdTech innovations, and investment in teacher training and development are crucial. We also expect enhanced public-private partnerships, a focus on regional and local content, infrastructure development in rural areas, and funding for research and development. Notably, while the National Education Policy 2020 recommends allocating 6% of GDP towards education, achieving this target seems challenging. However, we remain optimistic about a significant increase in allocation compared to the previous year. Additionally, the current GST rate for education services is 18%, but there is significant scope to revise this rate to boost both students and EdTechs focusing on affordability. These priorities are essential to fostering an inclusive, equitable, and future-ready education system.”

Susanne Pulverer, CEO and CSO, IKEA India.

“At IKEA India, we are optimistic about the upcoming budget’s potential to prioritize key areas that will drive quality and innovation in the industry. We look forward to the continued rapid expansion of infrastructure, particularly digital infrastructure, across the country. Additionally, we aim to deepen the Make in India initiative to help us cater to both domestic and export markets, and advocate for provisions that promote sustainable practices, including incentives for eco-friendly materials and green manufacturing. Investments in vocational training are essential to equip our workforce with contemporary skills. Lastly, initiatives aimed at increasing consumer income will definitely boost purchasing power and stimulate demand.”

Mr. Sanjay Borkar, CEO & Co Founder, FarmERP

“In the upcoming Union Budget, the Agritech industry holds high expectations for significant advancements in new-age technologies and the integration of sustainability within agriculture. Enhanced funding for technology adoption is critical, with increased investments in AI, machine learning, and blockchain needed to revolutionize farming practices, enhance productivity, and ensure sustainable growth. Tax incentives and subsidies for Agritech startups will accelerate innovation and attract young entrepreneurs to the sector.

Establishing additional research and development centers focused on agricultural technology will foster innovations and provide practical solutions for farmers and agribusinesses.

The industry also urges the government to enhance digital infrastructure in rural areas, recognizing reliable internet connectivity as crucial for farmers to access modern agricultural tools and platforms. Introducing policies that promote sustainable farming practices and climate-resilient technologies is imperative for achieving long-term environmental and economic benefits.

These measures will not only support the Agritech industry’s growth but also contribute to a more sustainable and resilient agricultural sector, benefiting both the agriculture industry and the broader economy.”

Mr. Sachin Sharma, Founder and Director – GEM Enviro Management Limited

“Building on the momentum of last year’s budget, which prioritized green growth, the upcoming Union Budget presents a significant opportunity to further strengthen India’s waste management infrastructure. However, significant challenges remain. Inadequate waste collection infrastructure and inefficient sorting and recycling systems continue to hinder progress. Valuable materials are still being discarded in landfills instead of being diverted for reuse.

To truly advance India’s circular economy goals, the government must encourage and support waste management agencies that are diligently working in this field. Additionally, streamlining the supply chain for e-waste and plastic waste is essential. This will foster a robust ecosystem where manufacturers, industry players, and recyclers can collaborate more effectively. While Extended Producer Responsibility (EPR) and the Waste Management Rules of 2016 have had a positive impact, more impactful compliance is needed to achieve truly meaningful results.”

Mr. Shyam Prasad, CEO, Brand Studio Lifestyle

“As we approach the upcoming budget announcement, we hope that the government will focus on boosting disposable income, especially for the salaried class, through tax benefits and dedicated rural community initiatives. The fashion segment being dynamic and highly responsive to changes in consumer behaviour, economic policies, and market trends. We hope the government will prioritise initiatives and investments to stimulate consumer spending, and also align with the ongoing infrastructure development initiatives. Moreover, the rise in rural spending provides a great opportunity to expand the consumer base in e-commerce, helping it grow and reach more people. Online shopping is becoming more popular among rural consumers, giving them access to a wider range of products and better deals. These strategic measures are primed to fuel not just economic growth but also pave the way for inclusive development and vibrant market opportunities across various sectors.”

Dr Sangita Reddy Joint Managing Director, Apollo Hospitals Group

We are hopeful that the government will continue to prioritize the healthcare sector. The interim budget 2024-25 in February rightly emphasized preventive care, women’s health, infrastructure expansion, and child development, marking significant strides towards a healthier future. We anticipate that the upcoming budget will maintain and strengthen this approach. The promotion of cervical cancer prevention by vaccination for girls aged 9-14 was one of the major announcements, and it represents a significant step toward improving women’s health. We hope the government will keep on supporting these programs. Furthermore, Initiatives under programs like U-Win and Mission Indradhanush should be encouraged. Strengthening infrastructure is crucial to effectively enhance health services in rural and remote regions, ensuring equitable access to health care. Increased support is expected from the government to achieve this goal.