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PremiumBudget 2024 Corporate Reactions Live Updates: Finance Minister Nirmala Sitharaman presented her seventh consecutive Budget on July 23 for the fiscal year 2024-25, breaking the record previously held by former Prime Minister Morarji Desai. This is the first Budget of the BJP-led NDA government since its re-election in June. The government has announced a new skilling program designed to train 20 lakh youth over the next five years through industry-designed courses.
A.P. Hinduja, Chairman, Hinduja Group of Companies (India), said, The budget shows Modi 3.0 is all about continuing the path to fiscal consolidation with the fiscal deficit target of 4.9% this year and 4.5% the next while maintaining the capex figure at 3.6%. The focus on the agri sector and housing infrastructure - affordable and urban - is substantive and augurs well. Quite a few changes in taxation have been announced which need a detailed study. Higher FDI is expected with a reduction in tax on foreign companies from 40% to 35%. Overall, a good budget for the macro Indian investment climate but could have been better for Indian investors.
George Alexander Muthoot, MD of Muthoot Finance, highlights the massive impetus on capex expenditure outlay of ₹11.11 lakh crore as evidence of the government's commitment to boosting investment activity and strengthening fiscal health.
The new credit guarantee scheme is expected to significantly enhance credit access for MSMEs, aligning perfectly with Muthoot Finance's commitment to supporting small businesses and driving entrepreneurship, especially among women.
The budget also addresses affordable housing under the PM Awas Yojana, with an allocation of 2.2 lakh crore rupees over the next five years, which will help resolve housing challenges for lower and middle-class families. Muthoot applauds the various initiatives aimed at boosting job creation and employability for young talent and women in India, aligning with the company's belief in the capabilities of youth.
The new internship program and initiatives to boost women's participation in the workforce are seen as positive steps. The budget balances growth promotion with fiscal responsibility, targeting an inflation rate of 4%, which is expected to create a stable economic environment for the financial services sector. Muthoot Finance looks forward to contributing to India's growth story by providing last-mile credit access to underbanked sectors of society.
The budget signals the continuity of India's strong macroeconomic story by setting the fiscal deficit for FY25 at 4.9%, lower than market expectations, and guiding for below 4.5% for FY26. Deepak Agrawal, CIO-Debt at Kotak Mahindra AMC, notes that the budget numbers are credible, with nominal GDP growth rate retained at 10.5%. The extra revenues from the RBI have been prudently utilized, with total expenditure increasing by only approximately ₹50,000 crore. Capital expenditure remains constant, and the balance is used to reduce the fiscal deficit.
Agrawal highlights that most of the increase in expenditure is directed towards asset creation, such as housing and roads, making the budget non-inflationary and providing comfort to the RBI on the inflation front. The commitment to fiscal consolidation in the upcoming year improves the likelihood of an India rating upgrade in FY26. Additionally, given the comfort on the Current Account Deficit, the duty on gold and silver imports has been reduced to 6%.
The Union Budget's strong emphasis on agriculture has been welcomed by Sanjiv Kanwar, Managing Director of Yara South Asia. He praised the budget's aim to bolster productivity and resilience in the agricultural sector. The commitment to releasing climate-resilient crop varieties and establishing bio-research centers reflects a commendable dedication to the long-term health, sustainability, and resilience of Indian agriculture. The budget provisions for agriculture and allied sectors provide a robust foundation for these initiatives.
Kanwar highlighted the focus on pulses and oilseeds and the development of large-scale clusters near FPO and consumption centers as key measures to enhance the supply chain's efficiency and reduce its carbon footprint. He also expressed approval of the government's commitment to digital public infrastructure, such as the digital crop survey, which will promote transparency and data-driven decision-making in agriculture.
Additionally, Kanwar applauded the budget's commitment to increasing women's participation in the workforce. This focus is expected to have a positive impact on agriculture, where empowering women is crucial for the sector's success. Opportunities for women in agricultural entrepreneurship, technology adoption, and leadership roles will benefit the entire industry.
Kanwar also emphasized the importance of the budget's emphasis on enhancing the ease of doing business in India under the Jan Vishwas Bill 2.0. Streamlining regulations and creating a more conducive business environment will be vital for attracting investment and driving growth in the agricultural sector. Overall, Kanwar believes this union budget lays a strong foundation for a prosperous and sustainable future for Indian agriculture.
The Government's visionary budget has been praised for solidifying India's economic stability and growth. CA. Ranjeet Kumar Agarwal, President of the Institute of Chartered Accountants of India (ICAI), commends the Prime Minister's announcement of new schemes focused on employment, skilling, and opportunities for youth. These provisions are set to empower the youth and drive economic growth. The government's strategic focus on employment, skilling, and MSME development aims to create a more skilled workforce and enhance entrepreneurial opportunities.
Five schemes have been announced to facilitate employment and skilling for 4.1 crore youth over the next five years, with a central outlay of ₹2 lakh crores. This initiative is expected to generate a skilled workforce to address current deficits and create employment opportunities. Additionally, financial support for loans up to ₹10 lakh for higher education will help students acquire necessary skills and pursue higher education.
These measures are anticipated to benefit the accounting profession and Chartered Accountants by increasing the demand for financial expertise in growing businesses. By equipping the youth with necessary skills, the foundation for a robust and dynamic economy is being laid.
The ICAI is committed to supporting these goals through various initiatives and expertise. The institute offers 28 Post Qualification Certificate Courses to continuously upskill its members, fostering a culture of excellence in the accounting profession. This commitment ensures that India’s economic trajectory remains strong and upward.
Abhishek Gupta, Founder and Managing Partner at Pierag Consulting LLP, recognizes the transformative potential of the new credit guarantee scheme for MSMEs. Gupta notes that access to finance is a critical barrier for many MSMEs aiming to scale and modernize. This initiative alleviates financial constraints and promotes technological advancements and productivity improvements. Pierag Consulting advises MSMEs to seize this opportunity to invest in state-of-the-art machinery and equipment to enhance operational efficiency and market positioning. Overall, Gupta views this credit guarantee scheme as a promising development for the MSME sector, anticipating significant positive impacts on business growth and sustainability across the country.
The government has launched a significant initiative to boost job creation in the manufacturing sector by reimbursing employers up to ₹3,000 per month for two years towards EPFO contributions for each additional employee. Aamar Deo Singh, Senior Vice President of Research at Angel One Ltd, notes that this program aims to incentivize the employment of an additional 50 lakh people, marking a substantial effort to address unemployment and stimulate economic growth in the manufacturing industry.
The NCLT is currently overwhelmed with numerous IBC cases, causing delays in corporate M&A actions and leading to operational inefficiencies. Diana Mathias, Partner at Cignas, highlights that the introduction of an integrated platform for IBC, along with additional tribunals, will ensure a faster recovery process and timely corporate actions, benefiting all stakeholders involved.
The logistics and supply chain sector is vital to India's growth story. Ratna Mehta, Managing Partner at Fundalogical Ventures, praises the budget's emphasis on infrastructure, manufacturing, and skilling as crucial areas for long-term development. This strategic allocation aims to establish India as a global logistics and manufacturing powerhouse. As an investment fund specializing in supply chain and logistics, Fundalogical Ventures is optimistic about supporting innovative entrepreneurs in this ecosystem. The government's initiative to set up e-commerce export hubs to aid MSMEs in exporting local products is seen as a significant move to drive growth through innovation. Additionally, the creation of industrial centers in historic hubs like Gaya under the 'Vikas bhi, Virasat bhi' scheme is expected to boost infrastructure development, create employment opportunities, and reduce the urban-rural divide while promoting income distribution.
The capex target for FY25 has been set at ₹11.1 lakh crore, reflecting an 11.1% increase. Apurva Sheth, Head of Market Perspectives & Research, notes that maintaining the capex outlay at this level, consistent with the interim budget announced in February, is a major positive. This decision underscores the government's commitment to balancing infrastructure development with the demands of coalition politics. The FY25 capex outlay stands at 3.4% of GDP, highlighting a strategic focus on sustaining economic growth through robust infrastructure investment.
The Union Budget 2024 has outlined a significant move towards natural farming, aiming to enroll one crore farmers in sustainable agricultural practices. Gaurav Kedia, Chairman of the Indian Biogas Association, commends the announcement of 10,000 bio input resource centers and support for FPOs in agri-product marketing. These initiatives are expected to greatly benefit the biogas sector by increasing the demand for organic manure, a byproduct of biogas production. The bio input resource centers will act as hubs for knowledge dissemination and biogas technology adoption, while FPO support will enhance the marketing of fermented organic manure (FOM) as a value-added product. The budget's emphasis on agricultural productivity, resilience, energy security, and innovation aligns with the biogas sector's goals, potentially leading to increased rural employment, reduced carbon emissions, and improved soil health.
Further support for the Pradhanmantri Aawas Yojna is expected to reduce housing shortages and generate employment. Additionally, lower stamp duties will reduce the cost of property acquisition, benefiting potential homeowners, noted Ravi Shankar Singh, Managing Director of Residential Transaction Services at Colliers India
Vimal Nadar, Head of Research at Colliers India, said, the announcement of 12 new industrial parks under the National Industrial Corridor, focusing on creating integrated zones, is expected to significantly increase the supply of Grade A industrial spaces. This initiative will also help boost the proportion of organized, superior quality stock within the industrial segment, stated Vimal Nadar, Head of Research at Colliers India.
Vimal Nadar, Head of Research at Colliers India, said, The Budget has highlighted the importance of providing necessary government support under the Andhra Pradesh Reorganisation Act, which includes establishing a capital city and fostering industrial development. According to Vimal Nadar, Head of Research at Colliers India, the provision for multilateral financial aid to develop the new capital city will drive significant momentum in construction and real estate over the next few years, particularly in commercial and residential sectors.
The Finance Minister has unveiled employment-linked incentives under three schemes aimed at skilling 20 lakh youth over the next five years. This initiative is expected to prompt government investment in infrastructure, leading to improved roads, transportation, and utilities, thereby making nearby real estate more attractive.
Employment and Skilling:
Five schemes to focus on 4.1 crore youth over 5 years with a central outlay of ₹2 lakh crore
Comprehensive internship scheme for one crore youth in top companies over five years
Employment-linked incentives, including one month's wage support for first-time employees
Women-specific skilling programs and increased workforce participation
MSME and Manufacturing Support:
Special attention to MSMEs and manufacturing sector
Credit guarantee scheme and term loans for machinery purchase
Technology support package for MSMEs
SIDBI to open 24 new branches to serve MSME clusters
Financial Initiatives:
Mudra loan limit increased from ₹10 lakh to ₹20 lakh for previous borrowers
Financial support for higher education loans up to ₹10 lakhs in domestic institutions
Integrated technology system for Insolvency and Bankruptcy Code (IBC)
Agriculture and Rural Development:
₹2.66 lakh crore provision for rural development
Transformation of agricultural research to focus on productivity and climate-resilient crop varieties
Initiative to introduce 1 crore farmers to natural farming over 2 years
Infrastructure and Regional Development:
Rental housing in PPP mode for industrial workers
Special financial support of ₹15,000 crore for Andhra Pradesh
New airports, medical facilities, and sports infrastructure for Bihar
Economic Outlook:
Inflation moving towards 4% target
India's economic growth described as a "shining exception"
Focus on job creation and boosting consumption, potentially benefiting consumer goods, real estate, and auto sectors
Nine Priority Areas:
Agriculture, Employment, Inclusive Development, Manufacturing and Services, Urban Development, Energy, Infrastructure, Innovation and R&D, and Next Generation Reforms
Women-Led Development:
Over ₹3 lakh crore allocated for schemes benefiting women and girls
Social Welfare:
Extension of PMGKAY (Pradhan Mantri Garib Kalyan Anna Yojana) for five years, benefiting over 80 crore people
Digital and Technological Advancements:
Development of Digital Public Infrastructure (DPI) applications for credit, e-commerce, law and justice, and corporate governance
Milan Mody, Managing Partner at N.A. Shah Advisors, highlighted the budget's significant benefits aimed at boosting new and additional employment. The budget proposes three new schemes, including one that offers a one-month wage of up to ₹15,000 for first-time employees with a salary cap of ₹100,000. This benefit will be disbursed in three installments, aiming to drive economic growth and expand the workforce.
Sandeep Shah, Partner at N.A. Shah Advisors, suggested that the Finance Minister may increase the holding period required to qualify for long-term capital gains, aiming to provide more stable funds in the capital market. Additionally, he recommended enhancing the tax rate for speculative income and offering incentives in the form of lower tax rates for investments with higher holding periods. These measures could encourage long-term investments in infrastructure projects, thereby supplementing government resources.
Shantanu Rooj, Founder & CEO of TeamLease Edtech, has welcomed the government's announcement of three new schemes aimed at encouraging employment for new candidates. He noted that the wage subsidy for employees and the support to employers will incentivize hiring fresh talent, while the linkage to EPFO registration will promote the formalization of jobs across the country.
Rooj also praised the proposed education loans, highlighting their dual benefits: providing financial support to needy students through an interest subvention scheme and promoting the growth of domestic institutions by requiring students to enroll in local institutions to qualify for the loans. He described these initiatives as a significant and welcome move for both the employment and education sectors.
Bhupendra Bahadur Tiwari, Professor and Director at CMR University, Bengaluru, praised the new budget for its substantial investments in education. He highlighted that enhancing vocational training and focusing on STEM education could make India a global knowledge hub. However, Tiwari stressed the need for close monitoring to ensure these initiatives benefit the intended recipients. He also emphasized the importance of collaboration between the government, private sector, and educational institutions to achieve these ambitious goals.
Bhupendra Bahadur Tiwari, Professor and Director at CMR University, Bengaluru, has lauded the new budget for its substantial investments in the education sector. He emphasized that enhancing vocational training and focusing on STEM education could propel India towards becoming a global knowledge hub. However, Tiwari noted the importance of closely monitoring the implementation of these initiatives to ensure they reach the intended beneficiaries. He highlighted that collaborative efforts between the government, private sector, and educational institutions will be crucial to achieving these ambitious goals.
The recently unveiled FY 25 budget has been hailed as a crucial step towards ensuring India's continued economic growth and development. Jaideep Kewalramani, COO & Head of Employability Business at TeamLease Edtech, praised the budget for its forward-looking framework and focus on several key areas.
"The FY 25 budget signals continuity and a forward-looking framework to strengthen India's growth trajectory," Kewalramani stated. "By prioritizing employment and skilling, inclusiveness and social justice, infrastructure, innovation, and next-generation reforms, this budget not only addresses immediate challenges but also lays the foundation for a knowledge-based growth economy."
A notable highlight of the budget is its emphasis on increasing women's participation in the workforce, which Kewalramani emphasized as crucial for sustained GDP growth and realizing the vision of a developed India. "Creating an ecosystem that supports women in the workforce and is culturally aligned is important," he added. "Encouraging higher education and skill development among females is another critical aspect that requires thrust."
The Finance Minister has announced a comprehensive plan to digitize public infrastructure for agricultural lands within the next three years. This initiative, set to benefit six crore farmers across the country, will be executed in partnership with various state governments.
T Manish, Research Analyst at SAMCO Securities, commented on the announcement, highlighting its potential impact. "The digitization of agricultural infrastructure will significantly enhance the efficiency and productivity of the farming community," he said. "This initiative is expected to benefit a range of companies involved in digital solutions, including CDSL, CE Info Systems, and Genesys."
Additional allocation will be provided for capital investment for growth, says FM
Support of road connectivity projects in Patna-Purnia Expressway, Buxar-Badalpur Expressway, Bodh Gaya, Rajgir, Vaishali and Darbhanga Expressway, along with bridging over river Ganga in Buxar, says FM
Industrial node for Gaya, says FM
Three Schemes
New Employees
Direct Benefit transfer as registered in the EPFO up to ₹15000
Job Creation in manufacturing
Support to employees will cover additional employment in all sectors within the limit of ₹3000 per month
Government's budget focuses on agriculture
Large scale vegetable production centres will be developed for thesupply chain, says FM
Domain experts from both outside and from government will focus on private sector research, says FM
We focus on employment, skilling, MSMEs, middle class, says FM
Pradhan Mantri Garib Kalyan Yojana extended for 5 years, says FM
Supplies of perishable object reaches market adequately, says FM
Union Finance Minister Nirmala Sitharaman is set to present the Union Budget 2024-25 in Parliament on July 23. In addition to the general budget, she will also present the budget for Jammu and Kashmir for the year 2024-25.
This marks the fifth consecutive year that Jammu and Kashmir's budget will be presented in Parliament rather than in the Union Territory's Legislative Assembly. The region has been without an elected government since 2018.
Nilaya Varma, Co-Founder and CEO of Primus Partners, highlighted the significant anticipation surrounding the upcoming budget, noting that it's been a long time since such high expectations have been seen. Varma emphasized the challenge of balancing the needs and hopes of 1.4 billion people but expressed confidence in Finance Minister Nirmala Sitharaman's ability to deliver, given her seven years of experience.
He pointed out that beyond measures to boost short-term consumption and adjust duties, there is keen interest in seeing specific initiatives and investments in capital projects. Varma also underscored the importance of encouraging private investments, reviving manufacturing growth to meet the rising job demands from the agricultural sector, and maintaining fiscal discipline to achieve the goals of Viksit Bharat.
Prime Minister Narendra Modi remarked yesterday that the Finance Minister will deliver a robust budget, emphasizing the government's commitment to ensuring its benefits reach the common man. On the first day of the Monsoon Session of Parliament, Sitharaman also presented the Economic Survey.
