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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.
“The continued emphasis on fostering investment and enhancing road infrastructure, especially in Andhra Pradesh and Bihar will facilitate growth in the manufacturing and automobile sectors. Focus on private investment in infrastructure, mining and housing sector is also likely to boost the sale of CVs," said Dheeraj Hinduja, Chairman, Ashok Leyland.
"Furthermore, reduction in duties on rare earth minerals will help in promoting sustainable mobility and this resonates with our commitment to fostering a cleaner and more sustainable future," added Hinduja.
“I would also particularly commend the fresh-thinking and approach of the government in ‘Skilling’ and ‘Urban development’ both of which demanded urgent attention. I greatly appreciate the operationalization of Anusandhan NRF and the exclusive venture-fund for Space segment," said Baba Kalyani, Chairman & MD, Bharat Forge Ltd.
Kalyani added, "More importantly, the 1-lakh crore financing pool to bolster private sector driven research and innovation at commercial scale will have a great impact in transitioning India towards a Product’s Nation in the long-term. While the budget allocation for Defence Industry is in expected lines, creation of the Critical Minerals Mission and articulation of India’s strategy on Small Modular Nuclear Reactors will go a long way in bolstering the AatmaNirbhar Bharat agenda."
“The provisions for the rural economy and infrastructure, coupled with land reforms and ease of doing business, will further boost the overall economy. Furthermore, this budget reinforces our commitment to supporting youth, farmers, women, and the underprivileged, ensuring inclusive growth and prosperity for all," stated, Pawan Munjal, Executive Chairman, Hero MotoCorp.
"We are glad the capex on infra projects tops govt’s priority, with 3.4% GDP allocation. We were expecting GST announcement of long-term continuation of reduced GST for BEVs; however, developing a climate finance taxonomy to aid capital for climate adaptation and mitigating climate change, is a step in the right direction for achieving climate commitments," said Santosh Iyer, MD & CEO, Mercedes-Benz India.
“The focus on job creation with three innovative employment-linked schemes is timely. The abolition of angel tax will give a big boost to our startups and young entrepreneurs who are the job creators of the future. The commitment to speed up IBC resolution will lead to 12,000 businesses restarting operations and many more jobs," believes, Anil Agarwal, Non-Executive Chairman, Vedanta Ltd.
He adds, “I am also delighted to see the announcement related to critical minerals mission. India must explore, mine and process these metals of the future domestically."
Puneet Chandok, President, Microsoft India & South Asia, said on the Budget 2024, “The Union Budget and Economic Survey’s emphasis on technological innovation and digitization sets India on the fast track to becoming an ‘AI-first nation,’ opening new opportunities for collective and inclusive progress from commerce to communities."
Chandok added, “Leveraging a digitized economy and an AI-ready workforce aligns well with the budget’s priorities towards employment & skilling, innovation, research & development, and productivity & resilience in agriculture. With a diffusion rate surpassing that of any previous technology, India leads the world in AI skill penetration and talent concentration rates. This progress is remarkable, with human capital, businesses, and public sector organizations rapidly adopting new technologies."
Uday Kotak, Founder and Director, Kotak Mahindra Bank, reacts to budget. On a post of X, he stated, “Well thought out budget. Fiscal discipline maintained. Right focus on employment and Msme. Capital gains tax smartly simplified, leaning in favour of revenue. STT increase is necessary sand in the wheels of high derivative volumes. Paradigm shift of saver to investor continues."
Sajjan Jindal, Chairman, JSW Group, said, “Glad to see the Union budget's commitment to fiscal discipline and infrastructure development. A fiscal deficit of 4.9 per cent, with a target of 4.5 per cent next year, shows our economic prudence. Prioritizing employment, skilling, MSMEs, and the middle class is crucial for building a strong, resilient economy."
“A long-standing demand for climate taxonomy has been committed in the budget speech. I am hoping that it is released soon, making climate-related financing easier to channel. In addition to that, a number of announcements keeping in mind climate change and the need to improve resilience to climate change is refreshing. Strong and well-executed initiatives to address the issues and opportunities would lead us to a more climate-resilient country," said Avishek Gupta, MD and CEO, Caspian Debt.
Gupta added, "The mention of rental housing in urban locations is much needed. We have had strong belief that the availability of good quality housing especially for lower income segments including migrant workers is much needed to improve the overall quality of life for everybody. "Removal of angel tax will hopefully improve the ability of startups to attract a wide variety of investors including individual investors."
“We commend the Indian government's recent budget, which places a significant emphasis on youth skill development and employment opportunities. The proposed initiative to equip 20 lakh young people with relevant skills over the next five years is commendable and timely, representing a strategic vision for the future, said Warren Harris, CEO & MD, Tata Technologies.
The commitment to upgrading over 1,000 ITIs is a welcome step forward in recognizing the importance of vocational training and upskilling to address the skill gap. This budget underscores the critical role of youth upskilling as an economic driver, providing a much-needed boost to India's growing workforce and empowering the government's Make in India initiatives," he said.
“We welcome the Union Budget 2024-2025 which focuses on positioning India as a global tourism hub through progressive initiatives. The surge in spiritual tourism has been recognized, and we are excited to see the sector receiving much-needed support in this year’s budget. The development of road connectivity projects, with a special emphasis on spiritual and cultural corridors, underscores the Government of India’s commitment to fueling the growth of the country's rich cultural and spiritual network of tourism," Nikhil Sharma, Managing Director and Area Senior Vice President- South Asia.
We are optimistic that this development will not only propel the domestic tourism sector but will also provide an opportunity for foreign tourists to further explore the rich culture of India," he said.
“The Union Budget 2024-2025 showcases a crucial commitment to boosting education, employment, and skill-building capacity, perfectly aligning with the Government's vision of Viksit Bharat by 2047. The budget’s special focus on skilling 20 lakh youth over the next five years through centrally sponsored schemes, the upgradation of 1,000 training institutes, and the provision of skilling loans are steps in the right direction," said Raghav Gupta, Managing Director, APAC and India, Coursera.
“I am particularly excited about the provision for 1 crore youth to gain industry experience through internships with 500 top companies – this will bridge the gap between theory and practice. The cross-sector collaboration can address the rapidly growing skills gap and social inequities, ensuring students transition smoothly into high-demand job roles. Businesses will also benefit from a diverse and skilled talent pool, reducing recruitment time and costs," he said.
"In today's digital era, where talent can emerge from anywhere, access to digital skills will be a game changer. We’re excited to support these initiatives and provide millions of Indians a gateway to more equal opportunities, all while unlocking our demographic dividend and accelerating our journey towards a $5 trillion economy," said Gupta.
"A big relief on reassessment and reopening of returns filed for earlier years which has been reduced to 6 years as opposed to 10 years earlier, including in search cases. LTCG on shares has been increased from 10% to 12.5%. Period for non-financial assets to qualify as LTCG is brought down to 2 years. Lowering of LTCG rate on sale of land/gold/unlisted shares to 12.5% in place of 20% is beneficial even though indexation is removed - overall will benefit most taxpayers. Overall, big push on agri & employment," said Swetha Kochar, Founder & Partner, PKC Management Consulting.
“The Budget 2024 provides a mixed outlook for the pharmaceutical sector. While the increased funding for R&D in pharmaceuticals and medical technology and the allocation of ₹35,000 crore under the Production Linked Incentive (PLI) scheme are commendable steps to boost domestic innovation and manufacturing, more support is needed," said Apurve Mehra, CEO of Biogetica.
“To truly position India as a global leader and reduce dependency on imports, we must see greater investment in building a robust R&D ecosystem and promoting API manufacturing. As the 'Pharmacy of the World,' India's pharmaceutical industry deserves more proactive support to sustain its growth and meet global standards," he said.
“The recent abolition of angel tax is a game-changer for startups in India. Previously, startups were burdened with a tax on investments from angel investors, which could reach up to 30% of the amount exceeding the fair market value. This often discouraged potential investors and hindered the growth of emerging businesses," said Vinay Maheshwari, CEO & Founder of The Health Factory.
“By removing this tax, the government has tackled a major investment barrier, making the Indian startup environment more appealing. This reform is expected to boost early-stage funding by 20-30% and accelerate the growth of over 50,000 startups nationwide. Such a move not only alleviates financial pressure but also aligns with global best practices, setting the stage for a more vibrant and dynamic entrepreneurial ecosystem," he said.
“The Union Budget holds great promise for the real estate sector, with significant initiatives in infrastructure, affordable housing, and urban development. These measures will drive innovation and growth in interior design and its execution. We are excited about the focus on digitization and sustainability, which aligns with our commitment to green and efficient solutions," said Keith Menon, Co-founder of Spiro Spero.
The budget also supports SMEs, empowering local suppliers and subcontractors, and furthering our mission to connect clients with reliable local partners. Overall, this budget sets the stage for transforming the real estate landscape, and we are ideally positioned to leverage these opportunities to drive growth and excellence in the industry," said Menon.
“Lower stamp duties are making property purchases more accessible for women, likely resulting in an increase in female homeowners. This reduction in property acquisition costs can also drive an uptick in real estate transactions, as women and families capitalize on the financial benefits. Additionally, the Finance Minister unveiled three schemes aimed at skilling 20 lakh youth over the next five years. The government may enhance infrastructure to support these initiatives, improving roads, transportation, and utilities, thereby boosting the appeal of nearby real estate," said Hitesh Avhad, Managing Director, Avhad Group.
“The recent announcement by the Finance Minister to set up an integrated tech platform under the Insolvency and Bankruptcy Code (IBC) is a commendable step towards enhancing the efficiency and effectiveness of the insolvency resolution process in India. This initiative is poised to bring greater consistency, transparency, and better oversight for all stakeholders, including the National Company Law Tribunal (NCLT)," said Mukesh Chand, Senior Counsel, Economic Laws Practice.
“However, several challenges persist that need immediate attention to ensure the IBC functions as a genuine resolution mechanism rather than merely a recovery tool. One of the primary concerns is the varying approach among tribunal members. Expertise in finance, market dynamics, and economic sensitivity is crucial to adjudicating complex insolvency matters effectively. There is a pressing need to appoint individuals with the appropriate experience and knowledge to handle these intricate cases," he said.
“Reports of substantial value erosion in cases before the tribunal due to unchecked delays in the approval of resolution plans and escalating costs are alarming. These delays not only devalue the assets but also increase the financial burden on the involved parties. To address this, the proposed tech platform must incorporate features that streamline the resolution process, reduce bottlenecks, and ensure timely approvals," said Chand.
“Moreover, the misuse of IBC as a recovery tool rather than a resolution mechanism is detrimental to the industry. Genuine cases of business disputes are being admitted, leading to the destruction of value, particularly in high-tech and innovative enterprises. This not only discourages entrepreneurship but also stifles innovation. The IBC must be fine-tuned to distinguish between genuine insolvency cases and those being filed for recovery purposes," he said.
“The NCLT is constantly riddled with delays. and having additional tribunals for IBC related matters is the need of the hour. Amendments to the IBC which result in quick handling and disposal of matters is a very positive development," said Natasha Treasurywala, Partner at Desai & Diwanji.
“The Government’s continued commitment to infrastructure as a priority area for ‘Viksit Bharat’ highlights the sectors significance as growth driver. With a capital expenditure of over 11 lakh crore rupees already announced in the interim budget, representing 3.4% of GDP, the refractory industry looks forward to playing an important role in India's next phase of economic transformation," said Parmod Sagar, Managing Director & CEO of RHI Magnesita India Ltd.
“Furthermore, announcements made for the ‘next gen reforms’ such as economic policy framework are welcome as these will support in achieving the nations economic goals with the ethos of ‘Make-in-India," he said.
Pradeep Shetty expressed that the hospitality sector had high hopes for the Union Budget 2024-25, presented by Smt. Nirmala Sitharaman, in line with the Government of India's vision of Viksit Bharat by 2047. However, he noted that the budget lacks structural changes needed to address the fundamental challenges the sector faces in a competitive global landscape and to accelerate its growth towards a $3 trillion economy by 2047.
Shetty pointed out that key demands such as GST rationalization, granting of infrastructure status, and policy reforms to ease doing business have not been addressed. Despite these omissions, he acknowledged some positive aspects, including the overall focus on infrastructure development, employment generation, skill development, and the development of religious tourism centers, which could help the sector tackle some critical challenges.
Amar Ambani noted that, despite the dampener for the investor community due to the capital gains tax and removal of indexation benefit, the Union Budget was balanced and consistent in policy. He highlighted the positive target set for the fiscal deficit at 4.9%, brushing aside concerns of increased populism. The agriculture package of ₹1.5 lakh crores is expected to boost the rural economy, while the slight relaxation in personal income tax slabs will aid consumption. Ambani emphasized the significant push towards improving the financial health and borrowing ability of MSMEs. The government's capital expenditure outlay of 3.4% of GDP is robust and aligns with their policy. Additionally, he appreciated the government's focus on further digitizing the economy with land and house registry. Ambani anticipates an even better budget next year, with potential comprehensive reviews of the Income Tax Act and a customs duty rate structure overhaul to simplify taxation and reduce disputes.
Vivek Iyer noted that the government has broadened the market for receivables discounting for MSMEs by lowering the threshold for more receivable buyers on the TREDS platform. Enhanced liquidity will help MSMEs manage their working capital better and fund their growth aspirations.
Vivek Iyer remarked that regulatory forbearance will allow banks to extend credit to stressed MSMEs in the SMA category due to external circumstances. Enhanced regulatory focus will ensure benefits reach deserving entities.
Vivek Iyer emphasized the significance of setting up e-commerce and export hubs through public-private partnerships to expand market reach for rural artisans. Digital public infrastructure in agriculture will provide more farmer data, enabling fintechs to access mainstream credit information, improving credit quality and increasing financial inclusion for farmers.
Krishan Arora highlighted the impact of new and additional employment incentives across manufacturing and other sectors. He stated that these incentives will encourage workforce growth, bolster the Make in India initiative, and complement existing PLI schemes, providing additional income tax benefits for hiring more employees.
Ramendra Verma lauded the allocation of INR 15,000 crore for Amaravati’s development through Infrastructure Development Authorities (IDAs). He believes this funding will transform Amaravati into a modern, sustainable city, driving economic growth and infrastructure development.
Ramendra Verma praised the Employment-Linked Initiative as a crucial effort to boost job opportunities in the formal sector. By aligning employment with targeted initiatives, the government aims to stimulate growth and positively influence the workforce.
Ramendra Verma highlighted the importance of Viability Gap Funding (VGF) in infrastructure development. He noted that while significant progress has been made in road development, careful planning and execution of other projects are essential. With a strategic approach, these projects can drive significant economic growth.
Nittin Arora emphasized the Government of India's recent proposal to increase Basic Customs Duty (BCD) on Printed Circuit Board Assembly (PCBA) for telecom equipment while reducing BCD on mobile phones, accessories, and chargers. He sees this as a massive step towards achieving Atmanirbhar Bharat goals, boosting domestic manufacturing, creating jobs, and making mobile phones more affordable. The increased BCD on PCBA will incentivize domestic production, create a level playing field, and attract foreign investment, demonstrating the government's commitment to promoting domestic manufacturing and economic growth in the telecom sector.
Siddhesh Mehta welcomed the Finance Minister's announcement to reduce customs duty on gold and silver to 6%. This policy change will benefit domestic jewelry manufacturers like Titan and Kalyan Jewellers, optimize supply chains, and increase profit margins.
Raj Gaikar noted that the allocation of ₹10 lakh crore for housing the urban poor will significantly enhance the profitability of small ticket-size housing finance companies. Companies like LIC Housing, PNB Housing, HUDCO, and Aadhar Housing Finance are expected to see increased revenue and profits, potentially driving a surge in their share prices.
Amar Nandu observed that the government's proposal of ₹2.66 lakh crore for rural development and skill initiatives will increase rural employment and income levels. This could lead to higher demand for two-wheelers and entry-level passenger vehicles, benefiting companies like Hero Motocorp and Maruti Suzuki. Interest rate cuts could further improve vehicle demand.
T Manish noted that the Finance Minister's announcement to extend finance to shrimp production and marketing will benefit the industry. Direct beneficiaries include Waterbase, Avanti Feeds, and Apex Frozen Foods.
Siddhesh Mehta commented on the Skilling Program, which aims to train 20 lakh youth over five years through industry-designed courses. This initiative is expected to enhance employability, reduce unemployment, increase disposable income, and stimulate economic growth. Companies like NIIT Ltd and Aptech are likely to benefit.
Rupak De observed that the market reacted negatively to the increase in the Securities Transaction Tax (STT) and capital gains taxes. He noted that the Nifty index slipped towards 24,000, while the Bank Nifty drifted down by 1,000 points. Despite this, the Finance Minister kept the capital expenditure intact at ₹11.11 lakh crore and projected a fiscal deficit of 4.9% for FY25.
De highlighted that the budget is primarily focused on rural and underdeveloped areas, which has come at the expense of financial market gains. This focus has led to a negative market reaction, reflecting concerns over the impact of these tax increases on investment returns.
Sumant Sinha praised the Union Budget 2024 for advancing the Prime Minister’s commitment towards India's clean energy transition. He noted that the Finance Minister’s announcement of a policy document on India’s energy transition pathway and pumped storage policy will provide much-needed long-term clarity for investments across the value chain.
Sinha highlighted the continuation of the PM Surya Ghar Muft Bijli scheme, which has received an overwhelming response, as evidence of the growing appetite for clean energy solutions among citizens. This initiative aligns perfectly with national sustainability goals.
He also pointed out the promising future of nuclear energy as a cornerstone of India’s energy mix, with innovative nuclear technologies being developed in partnership with the private sector. With continued policy support, accessible financing, and robust public participation, Sinha expressed confidence in achieving India’s renewable energy aspirations for a cleaner, more resilient, and economically vibrant future.
Govind Sankaranarayanan hailed the Finance Minister's budget announcement as a significant step forward for both the MSME sector and the renewable energy landscape in India. He emphasized Ecofy's excitement about the dual focus on supporting MSMEs and promoting sustainable energy solutions.
He highlighted the special attention given to MSMEs, including the credit guarantee scheme and term loans for machinery, as a much-needed boost for the manufacturing sector. These measures will provide the financial support necessary for MSMEs to modernize their operations, adopt new technologies, and enhance their competitiveness. He found the formulated package to finance technology support especially commendable, as it will enable MSMEs to innovate and thrive in an increasingly digital economy.
Sankaranarayanan also praised the extension of the PM Surya Ghar Muft Bijli scheme for installing rooftop solar panels. This aligns perfectly with Ecofy's mission to promote sustainable energy solutions. The scheme's goal to provide up to 300 units of free electricity to 1 crore households each month is a groundbreaking initiative that will significantly reduce energy costs for families while promoting the adoption of renewable energy. The overwhelming response, with 1.28 crore registrations and 14 lakh applicants, underscores the public's enthusiasm for sustainable energy solutions.
He believes these initiatives will not only drive economic growth but also contribute to a greener and more sustainable future. Sankaranarayanan reaffirmed Ecofy's commitment to supporting these efforts and working closely with the government and other stakeholders to ensure the successful implementation of these programs. Together, he concluded, we can create a resilient economy that balances development with environmental sustainability.
Murthy Nagarajan emphasized the government's fiscal strategy to stimulate economic growth and enhance resilience to global uncertainties. He noted that the fiscal stance of the 2024-25 budget is twofold: providing a positive stimulus to economic growth and making the domestic economy resilient to global headwinds. The fiscal deficit for the current financial year is projected at 4.9% of GDP, compared to the 5.1% target in the interim budget. Gross borrowing and net borrowing are set at ₹14.01 and 11.63 lakh crores, respectively, which is lower by ₹10,000 crores.
Nagarajan highlighted that the government is reducing net T-Bill issuance by ₹50,000 crores. However, the expected reduction of ₹50,000 crores due to the lower fiscal deficit has not materialized. According to the medium-term fiscal consolidation roadmap, the net debt of the central government is expected to be 57% of GDP, with a progressive move lower. The government is targeting a fiscal deficit of 4.5% or lower in the next financial year. Due to global uncertainty, the government is not providing a further roadmap, opting to retain fiscal flexibility to respond to these events.
Jasbir Singh, Chairman & CEO, Amber Enterprises, said, The government’s continued focus on infrastructure development is a positive move. After the 11 Lakh Cr capex announcement in the interim budget, the government expects the states to carry on the policy thrust. The increase in BCD from 10 to 15 percent on PCBA of specified telecom equipment will enhance localization, spur domestic manufacturing, and create an ecosystem of augmented manufacturing capacity in the country, in line with the government’s goal towards Atmanirbhar Bharat.
T Manish, Research Analyst, SAMCO Securities, said, The Finance Minister has announced revised tax rates under the New Tax Regime, including an increase in the standard deduction from 50000 to 75000 for individuals. This would result in savings of around Rs. 17500 in net taxes for individuals. This would benefit FMCG companies such as HUL, ITC, Dabur, Nestle and their suppliers like Polyplex and Uflex. Increased savings would also boost inflows to wealth management firms and stock broking companies through SIPs and brokerage.
Gul Basantani, Partner, Government, Infrastructure, Development sector Advisory Services, Forvis Mazars in India, said, Finance Minister Nirmala Sitharaman's focus on energy security is crucial for addressing India's growing energy demands and meeting NDC targets. The new 2400 megawatt power plant and the PM Suryaghar Muft Bijli Yojana, providing free solar electricity to 1 crore households, are significant steps. These initiatives will boost our energy infrastructure and encourage renewable energy adoption, contributing to India's sustainable and secure energy future.
Amar Nandu, Research Analyst, Samco Securities, said, The Finance Minister has provisioned a total outlay of Rs. 26,000 crore for expressways in Bihar and a bridge over the river Ganga. This will create job opportunities and boost physical infrastructure. The expressway connections will reduce transport time for goods, enhance regional connectivity, and foster tourism and industrial estate development. The skill development programs will build the human capital needed for manufacturing plants. The plan to build world-class pilgrim centers in Gaya and Rajgir will propel the temple economy, attracting more investment and unlocking growth in related areas.
Arpan Sahoo, Co-founder and Chief Operating Officer, KaleidEO, said, The establishment of the 1000 cr VC Fund addresses a crucial funding gap in nascent space R&D. This initiative will be transformative in building sovereign capabilities, fostering local IP creation, and driving innovation. These funds will enable startups to attract talent, establish local facilities, and develop export potential for the next decade. As the Indian economy and startup ecosystem, particularly the NewSpace sector, continue to grow, the consistent revenue generation and performance of space tech startups will reinforce the government's confidence in the Indian NewSpace ecosystem.
Amrutesh Reddy, Director, NDR InvIT Managers, said, The Union Budget 2024-2025 presents a compelling landscape for the warehousing and InvIT sectors. The government's robust infrastructure allocation of ₹11.11 lakh crore, along with the announcement of 12 new industrial parks and the focus on industrial corridors, is set to boost demand for modern warehousing facilities. The budget's emphasis on e-commerce export hubs for MSMEs and initiatives for solar panels align perfectly with evolving market needs and sustainability goals for warehousing. These measures create a favorable environment for InvITs to thrive.
Ratna Mehta, Managing Partner, Fundalogical Ventures, said, Abolition of angel tax will provide a boost to the budding Indian startup ecosystem. It will encourage the flow of capital without tax leakages, especially relevant at a time when the funding crunch is impacting startup liquidity. The logistics and supply chain is the lifeline of India's growth story. The budget's identification of infrastructure, manufacturing, and skilling as key areas for long-term development is a step in making India the logistics and manufacturing powerhouse of the world. The government's move to set up e-commerce export hubs for MSMEs is a significant step in driving growth through innovation.
TEAM (Tech Entrepreneurs Association of Mumbai), said, The abolition of the angel tax in the current union budget is a landmark decision by the government and a significant boon for the startup ecosystem. This move alleviates a considerable financial burden on early-stage startups, enabling them to attract much-needed investment without the fear of punitive taxation. Startups will now be better positioned to scale their operations, invest in cutting-edge technologies, and create high-quality jobs. This decision also boosts investor confidence, encouraging more angel investors to support emerging ventures. We commend the government for this visionary move, which will accelerate the momentum of the Indian startup ecosystem and contribute to the realization of our collective goal of becoming a $1 trillion digital economy.
We welcome this significant change in rationalization of the long-term capital gain taxation for business trusts in this budget. InvITs/REITs getting taxed at parity with equities will enhance their attractiveness for investors and will strengthen their position as platforms providing superior risk-adjusted returns. We believe that this will also enable InvITs and REITs to become part of stock exchange indices, which will add significant liquidity.
It is very encouraging to see a number of announcements aimed at bolstering the MSME sector in the Union Budget 2024-25. The Finance Minister's introduction of a credit guarantee scheme specifically tailored for MSMEs in the manufacturing sector is a particularly promising move. This initiative, which facilitates access to term loans for MSMEs to purchase machinery and equipment without the need for collateral or third-party guarantees, will incentivize formal lending at the last mile by mitigating credit risk. The enhancement of the Mudra Yojana loan limit from INR 10 lakhs to INR 20 lakhs for entrepreneurs will expand the scheme, empowering many more MSMEs. The new assessment model for MSME credit, using digital footprints, is a huge step forward in driving financial inclusion at scale.
The removal of the angel tax will make it significantly easier for us to complete transactions faster and streamline the investment process. Previously, the requirement for income tax officers to understand and assess valuations led to unnecessary conflicts and delays, involving CAs, valuers, and tax officials. This change allows us to focus on our primary job—investing in and supporting innovative startups—without the burden of navigating cumbersome tax regulations. The Indian Budget 2024’s tax reforms are a major boost for the VC, PE, and startup ecosystem. The reduction in LTCG tax from 20% to 12.50% for startups and Alternative Investment Funds will foster growth and innovation, making India an even more attractive destination for global investors.
