Budget 2024: Key Highlights and Analysis

All eyes were on Finance Minister Nirmala Sitharaman today as she unveiled the Interim Budget 2024. With the Lok Sabha elections looming large, this is simply an interim budget, and the final one of the current Narendra Modi government.

While the Finance Minister didn’t announce any populist measures and left the tax rates for direct and indirect taxes unchanged, she offered up a vision for the next few years, saying that the next five years will witness unprecedented growth. 

Overview of the Budget

The interim budget for 2024-25 focuses on the government’s achievements, fiscal health, and economic direction. It sets the stage for the forthcoming financial year and provides insights into the government’s plans and priorities. Let’s explore the major highlights of the budget:

Housing for All

One of the prominent announcements in the budget is the addition of 2 crore more houses under the Pradhan Mantri Awas Yojana – Gramin (PMAY-G). This initiative aims to provide affordable housing to the rural population, addressing the housing needs of the marginalised sections of society.

Fiscal Discipline and Economic Growth

The revised fiscal deficit for 2023-24 (FY24) stands at 5.8% of the GDP, while the target for FY25 is 5.1% of the GDP. The government aims to reduce the fiscal deficit to below 4.5% of the GDP in 2025-26 (FY26). This demonstrates the government’s commitment to maintaining fiscal discipline while focusing on economic growth.

Tax Reforms

No changes were made to the income tax slabs in this budget, which is understandable from a fiscal prudence perspective. However, given inflationary pressures and higher living costs, the salaried middle class has good reason to be left wanting. One hopes that the tax burden for the salaried class will be reduced sooner rather than later.

During proceedings, the Finance Minister announced that the number of tax filers has increased by 2.4 times, and the direct tax collection has tripled since 2014. The projected tax receipts for 2024-25 are Rs 26.02 lakh crore.

Boosting Research and Innovation

To encourage research and innovation in the private sector, a corpus of Rs. 1 lakh crore will be established with a 50-year interest-free loan provided. This corpus aims to provide long-term financing and re-financing with low or nil interest rates, fostering significant growth in sunrise domains.

Deep Tech Technology for Defence

The government is launching a new scheme to strengthen deep tech technology for defence purposes. This initiative aims to expedite self-reliance (Atma Nirbharta) in the defence sector. It underscores the government’s commitment to leveraging technology for national security.

Strengthening Medical Infrastructure

The budget highlights the government’s plans to set up more medical colleges by utilising existing hospital infrastructure under various departments. A committee will be established to examine the issues and make relevant recommendations.

Empowering Women

The budget emphasises the government’s efforts towards empowering women. Initiatives such as making triple talaq illegal, reserving one-third of seats for women in Lok Sabha and state assemblies, and providing over 70% of houses under the PM Awas Yojana in rural areas to women aim to enhance their dignity and promote gender equality.

Renewable Energy

The government has set a target to enable 1 crore households to obtain up to 300 units of free electricity every month through rooftop solarization. This scheme aligns with the government’s commitment to sustainable development and achieving ‘net zero’ by 2070.

Boosting Tourism

To promote tourism, the budget proposes the provision of long-term interest-free loans to states for encouraging development in the tourism sector. This initiative aims to boost tourism infrastructure and attract both domestic and international tourists.

Youth and Technology

The budget highlights the government’s focus on empowering the youth and leveraging technology for development. A new scheme will be launched to strengthen deep tech technology for defense purposes and expedite self-reliance. Additionally, a corpus of Rs. 1 lakh crore will be established to provide long-term financing and re-financing for research and innovation in sunrise domains.

All-Round Development

The government’s approach to development is all-round, all-pervasive, and all-inclusive, with a focus on social justice. The budget aims to address the needs and aspirations of the poor, women, youth, and farmers, ultimately guiding the country’s growth.

Positive Transformation

The Finance Minister noted that the Indian economy has witnessed positive transformation in the last 10 years. The government’s focus on governance, development, and performance (GDP) reflects its commitment to driving economic growth and improving the overall well-being of the nation.

Industry reactions to the Budget

With Finance Minister Nirmala Sitharaman preseting the Interim Budget 2024, industry and civil society alike have much to take in from their respective perspectives. 

Here’s a roundup of takeaways shared with Team Marksmen from an array of seasoned industry leaders and experts.

Dr. Niranjan Hiranandani, Founder, Hiranandani Group and Chairman, National Naredco

“Hon’ble FM decoded an integrated and equitable growth budget outlay encompassing significant social reforms, enhancing economic growth value chain, emphasize of sunrise sectors and impetus to urban & rural housing with mega infrastructure projection.

India has risen in its global leadership by paving the way for world economies, setting new standards, establishing strong geopolitical allies and addressing geoeconomic vagaries.

The buoyancy in the domestic economy is an outcome of the comprehensive GDP growth mantra in the pursuit of the Sab ka Saath, Sab ka Vikaas objective. Keeping the fiscal consolidation target at 5.1% will decrease the cost of borrowing for businesses and industries. This in turn will help stimulate economic growth, stabilize the economy and reduce the risks of inflation.

The enhancement in infrastructure outlay by 11% will bode well for firming up the growth of residential, commercial and industrial real estate asset classes across the geographies. The augmentation of multi-modal corridor connectivity with new railway corridors, and doubling of airports and ports corridors will have a multiplier effect on the real estate landscape. 

The extension of the PMAY scheme for rural areas is in accordance with the objective of Housing for all laid by the Hon’ble PMO. A focused direction is set for addressing the housing deficit needs of the urban poor with the buy or build house motto. The continual skilling & Upskilling of the working populace will help the sector gain a competitive advantage and increase direct as well as indirect employment opportunities. Therefore, India’s vision for Amrit Kaal is stated very clearly and thus the country is on track to becoming Vikshit Bharat by 2047.”

Rohit Bansal, Co-founder – Snapdeal and Titan Capital

“The Interim Budget 2024 budget outlines a transformative vision by the government, building on a decade of positive change. It’s focus on boosting innovation, developing new trade & investment corridors, nurturing the EV ecosystem, enhancing agricultural productivity, expanding healthcare coverage, supporting SHGs highlights the inclusive approach. This is a decisive step towards a #ViksitBharat2047.”

Anil Joshi, Managing Partner, Unicorn India Ventures

The interim budget was inline with the expectations. However, startups and sunrise sectors continue to find a special mention even in the interim Budget. The extension of tax exemption to Startups is a good gesture and provision for Rs 1 lakh crore toward sunrise segment at nominal or zero interest rate will certainly help small business.

The focus on boosting EV charging station will drive sale of both vehicles and charging infrastructure. No change to direct and indirect tax was also expected, however we may see new rates in the full budget to be proposed in July 2024.”

Mayuresh Raut, Co-founder & Managing Partner, Seafund

“The statement is along the line mentioned earlier. It shows continuity, shows there will be no surprises that investors and markets abhor and also signals that the full budget will focus on ensuring sovereign wealth funds will welcome these initiatives and will be energised to double down on capitalising on the India opportunity.

Further, the scheme for deeptech in defence will not only help the government start addressing the Make in Bharat initiative through indigenous technologies in defence but also unlock these technologies to other civilian uses. Deeptech focused funds like ours will definitely benefit from enabling initiatives like this.

The solar rooftop schemes will be a big boost to not only meet our goals for clean energy, but will also set up India to start addressing the EV charging infrastructure that is currently holding back wider adoption of EVs. It will also create enormous jobs for installation, manufacturing and maintenance of solar infrastructure and a secondary effect will be opportunities available for startups to build on this.

Extension of tax benefits for sovereign wealth funds expiring on 31st March 23 to 31st March 25 is a good signal from the government to indicate that there will be continuation of beneficial policies and friendly institutional investor policies.”

Sanjay Goenka, Managing Director and CEO, 3F Oil Palm

“The Union Budget 2024 further builds on the push for edible oils self-sufficiency through its “Atma Nirbhar” strategy in all agro-climatic zones. Investing in our Annadata’s (farmers’) future is investing in India’s future itself. While the timely push for edible oil production of mustard, groundnut, sesame, soybean, and sunflower oils is welcome, the scope should be extended to oil palm as well given its higher productivity. The vision for research, modern farming techniques, and infrastructure investment aligns perfectly with our company’s mission to empower farmers and unlock the sector’s potential in palm oil production and processing. We are enthusiastic to empower our farmers and be a part of the journey towards a truly self-reliant India.”

Sigal Atzmon, CEO & Founder, Medix Global

“Having worked across diverse healthcare systems, I can see that India is taking important steps towards building the next phase of its healthcare eco-system with a shift towards more affordable, data driven and accessible care. While there are still gaps in certain areas, the Union Budget’s dedicated focus on consolidating maternal and child health schemes reflects a wise approach to streamlining care delivery. Additionally, the announcement encouraging vaccination for girls to prevent cervical cancer is a proactive step towards prioritising preventive healthcare for women. Medix Global remains dedicated to collaborative efforts for a future defined by personalised care, inclusivity, and prevention, and we are confident that these initiatives will have a positive impact on healthcare delivery.”

Anirudh A Damani, Director, Artha India Ventures

“In this year’s interim budget, the Finance Minister has adeptly spotlighted the government’s dedication to pivotal sectors poised to elevate GDP growth, with a particular focus on empowering youth, women, and micro-entrepreneurs. This commitment is further enriched by an ambitious agenda to enhance digital infrastructure, aiming to foster entrepreneurship nationwide and boost employment opportunities. Notably, the budget’s provisions for EV and deep tech sectors signal a continued allure for venture capital in startups, reinforcing investor confidence. The introduction of a Rs 1 lakh crore corpus for long-term, interest-free loans emerges as a landmark initiative, promising to invigorate entrepreneurship in tier 2 and 3 towns. Our experience over the past decade affirms the high potential of these regions as the cradle for India’s next 100 unicorns, where access to early-stage capital has remained elusive. The government’s move to provide interest-free loans is a game-changer, not only facilitating capital accessibility but also encouraging deeper penetration by institutional investors in search of disruptive startups. This strategic intervention is poised to reshape India’s entrepreneurial landscape, heralding an era of widespread innovation and growth.”

Yashoraj Tyagi, Chief Executive Officer, CASHe:

“The 2024 Union Budget consistently emphasizes the tech sector, highlighting a commitment to inclusive growth across diverse fields such as agriculture, finance, health, and communities, fostering economic empowerment throughout all sectors.

The spotlight on expanding the EV ecosystem creates exciting prospects for fintech companies to innovate financing and payment solutions in this rapidly growing sector. Additionally, the government’s emphasis on developing new tourist attractions has the potential to elevate tourism nationwide, possibly spurring demand for travel loans and enhancing economic growth. This not only strengthens the lending sector but also extends credit accessibility for travel to a broader audience keen on exploring emerging tourist destinations.

Furthermore, the recent establishment of prestigious higher education institutions such as IITs, IIITs, IIMs, and AIIMS underscores a commitment to skilling and reskilling the workforce. This, combined with increasing aspirations for higher education, may lead to a surge in demand for education loans, creating fresh opportunities for the fintech industry.

It is also commendable that the FM announced initiatives under PM Mudra Yojana and Start-Up India for young Indian startup founders who have been creating employment opportunities for Indian citizens in various sectors, including fintech. The budget presents a well-rounded vision for economic progress, offering fertile ground for financial innovations and growth across various sectors.”

Anand Kumar Bajaj, Founder MD CEO, PayNearby

“The interim Union Budget presented by the Ministry of Finance is well-rounded and optimistic. It is extremely encouraging to see the underprivileged, women, youth, and farmers at the heart of Budget 2024-25, as it will lay the foundation for faster financial empowerment and a more equitable society. We wholeheartedly embrace the Lakhpati Didi initiative, aligning with the Government’s vision to create 3 crores self-reliant Lakhpati Didis. Through our association with various livelihood missions across states, we have successfully onboarded 100,000+ women as Business Correspondents, empowering them with skills to offer financial and digital services to their communities. As we eagerly anticipate Union Budget 2024, we seek specific measures, including a 5% GST rate for last-mile empowerment startups, a GST waiver on all financial services from BC outlets, Income Tax relief, and reduced import duty on essential financial services devices.”

Harshvardhan Lunia, Chair, Fintech Convergence Council, and Founder & CEO, Lendingkart

“In examining the Interim Budget, it is evident that Finance Minister Nirmala Sitharaman has crafted a vision encapsulating the themes of inclusivity, self-reliance, and comprehensive national development. The focus on marginalized groups and regional empowerment reflects a nuanced understanding of the diverse needs driving India’s progress. Zooming into the Fintech and Lending landscape, the budget introduces strategic measures to catalyze long-term financing for private sectors, aligning with the nation’s pursuit of technological advancement. The emphasis on innovation, skilling initiatives, and MSME support underscores a forward-looking approach tailored for India’s digital age, aligned with the imperative of steering India’s economic growth in the digital era. The financial sector’s preparation and borrowing targets for the upcoming year signify a well-balanced approach to meet investment requirements. From a bird’s eye view, the budget appears to set a positive tone for the convergence of technology and finance, contributing to the overarching goal of national development.”

Ankit Ratan, Chair, Regtech Committee, Fintech Convergence Council, and Co-founder, Signzy:

“The Budget has recognized the importance of Digital Public Infrastructure as the new factor of production driving the formalization of the economy. A key factor that drives the digital economy and enhances adoption is Digital Trust. It revolves around customers’ confidence in the security, reliability, and honesty of transactions carried out through banking channels. We believe a robust digital public infrastructure along with an enhanced digital trust ecosystem will promote responsible innovation while risk-proofing businesses from cybersecurity concerns. Creating an environment of trust beyond the established physical branches of a bank through real-time monitoring of biometric systems and cybersecurity resilience among others is the way forward. This promises an economy where technology empowers trust that paves the way for a brighter and more equitable future.”

Sanjay Vyas, Executive Vice President and Managing Director, Parexel India

“There were some significant announcements for different sectors in this interim budget. Though there were no major announcements for the clinical trials or the pharmaceuticals sector, initiatives to set up more medical colleges by utilizing the existing hospital infrastructure is highly commendable. This would attract more industry-academia partnerships for clinical research organizations and facilitate a larger research pool. It will also facilitate closer collaboration between clinicians and researchers, and establish a more affordable infrastructure. Additionally, the emphasis on innovation and technological advancements will be highly beneficial for innovation in the healthcare sector at large. We hope that in the next budget after the elections, the government increases public healthcare spending to 2.5% of GDP.”

In Conclusion

In the build-up to the Budget, the Ministry of Finance offered a positive outlook, saying that the Indian economy is set to grow at 7% over the next few years, and will likely become the third-largest economy in the world in the next three years, with a GDP of $5 trillion.

The key highlights of the recently revealed interim budget, such as the focus on housing, research and innovation, and empowering women, showcase the government’s commitment to addressing the needs of various sections of society. With a strong emphasis on technology, renewable energy, and tourism, the government aims to propel India towards a brighter and more sustainable future.