With Budget 2024 now announced, the reactions from industry experts are coming in fast and furiously. This year’s fiscal plan has prompted a diverse set of responses from leading figures in the business and economic sectors. In this series of quotes, we capture their expert evaluations of the budget’s potential impacts, offering you a comprehensive view of how different industries are preparing for the changes and challenges of the upcoming year.
Today’s budget introduces pivotal initiatives for the e-commerce sector, notably addressing the skills gap and enhancing MSME operations. The creation of E-Commerce Export Hubs through PPPs aligns seamlessly with ShopClues’ mission to expand global market access for MSMEs and traditional artisans.
The focus on women-specific skilling programs and market access for women-led enterprises is commendable. Aligning course content with industry needs, particularly in e-commerce, will enhance digital literacy and technical proficiency among MSMEs. Collaborative efforts with local institutions and e-commerce platforms like ShopClues will drive these initiatives, promoting economic empowerment.
Furthermore, reducing the TDS rate from 1% to 0.1% and removing the Equalisation Levy are significant reliefs for online sellers , fostering a favorable environment for online transactions and enhancing global competitiveness. Overall, the budget paves the way for a robust and inclusive digital economy. – Anuraag Gambhir, Managing Director, Shopclues
The key highlight of the budget is the fine balance between fiscal prudence and welfare schemes, with a special focus on Bihar and Andhra Pradesh. With most pointers in line with the interim budget, the key takeaway is the downward revision to the FY25 fiscal deficit figure to 4.9% and an increase in capital gains tax. Though there is a tinge of populist measures on expected lines, the government remains focused on job creation, infrastructure development, strengthening the ecosystem for manufacturing, renewable energy and new sectors and creating disposable income in the hands of people with key focus on rural. Though we do not rule out some kneejerk reaction in equity markets, the long-term trajectory and the intention of the government looks pro-economy and adding wings to move the economy towards the USD 5 trillion mark in the near term.- Manish Chowdhury, Head of Research, StoxBox
The introduction of the MSME credit guarantee scheme for collateral-free loans and the doubling of the MUDRA loan scheme to Rs 20 lakh marks a significant positive development. These measures will facilitate easier access to capital for the MSME sector, fostering favorable conditions ahead.
The allocation of Rs 10 lakh crore for the Prime Minister’s urban housing plan is commendable. Encouraging states to reduce stamp duties is a positive development for aspiring homeowners, as lower stamp duties will make homeownership more affordable and stimulate the housing market. In my view, these initiatives will also significantly boost the home loan industry as a beneficial side effect.We also welcome the abolition of the 30% Angel Tax for all investor classes. This move will encourage more angel investors to support startups, fostering innovation and growth in the startup ecosystem. – Mr Manish Aggarwal, CEO & Founder, FINQY
The Hon’ble Finance Minister along with officials of the Ministry of Finance, held a marathon and focussed Trade & Industry Pre-Budget Consultations. It is heartening to witness that many of the valid recommendations of Trade Bodies have seen light of day in this Union Budget, making this budget a reflection of a Budget For the People, By the People and of The People. The Full Union Budget 2024 lays down the roadmap of the next five years. Propelled by a robust Tax Revenue buoyancy of 1.4 during FY 23-24 the focus now is on job creation through GDP growth by putting in more disposable income in the hands of the common man. New Income Tax Scheme relaxations in standard deduction, slabs reduction and family pension deduction relaxation may help in savings of around Rs.35000 per taxpayer.
As requested by the Trade & Industry bodies and laid down by the Economic Survey, for MSME businesses the compliance burden is also sought to be relaxed; litigations will be reduced in new VIVAAD SE VISHWAS SCHEME.
TDS provisions have been relaxed substantially like relaxation of rectification timelines, penalties, reduction in TDS Rates u/s 194O for E Commerce operators.
Big Corporations have been motivated to invest more in Plant, Machinery, Equipment in IPR and make in India by relaxations on import duties.
To prevent drain of wealth from India where certain MNCs show less profit in India and more outside India, this budget has pushed for Global Minimum Tax of 15% and promoting safe Harbour Rules.
The GST Amnesty Scheme for waiver of interest or penalty or both, relating to demands raised under Section 73, for FY 2017-18 to FY 2019-20;, and making the new time limit for availing ITC as per Section 16(4) of the CGST Act as 30/11/2021 to avail ITC pertaining to financial years 2017-18, 2018-19, 2019-20 and 2020-21; are an icing on the cake.- Vivek Jalan, Partner Tax Connect, A PAN India Multi disciplinary firm
This is recognition of the growing need for a deeptech economy. However, alongside the R&D Fund, the government should look at the Intellectual Property regime. The much overdue Patent Policy needs to come out soonest to enable maximisation of R&D Fund. -Bhaskar Majumdar, Managing Partner, Unicorn India Ventures
The 1000 Cr fund of funds for space tech is testimonial to India’s capability in coming up with breakthrough solutions at low cost. This will certainly help space tech companies to look for much needed early stage capital to get started. This will certainly help mobilise over Rs 4000 Cr, great move. Angel Tax abolishment was long pending, glad that Hon. FM has heard industry voices and has finally abolished it. This will certainly help in expansion of angel investment in India and will take away a lot of burden from the minds of everyone on tax notice for tax paid investment. This will also free up a lot of domestic capital and improve the funding sentiment in a strong way. – Anil Joshi, Managing Partner, Unicorn India Ventures
This was an albatross that hindered much needed capital to be deployed to deserving founders. Removal of this dreaded tax will give a huge fillip to startups in the country and free up investors to focus on the investments without having anxiety on how to deal with their implications. A few other things that work well for deep tech focused funds like us. The rooftop solar policy, the pumped storage policy and research and development for small & modular nuclear reactors, Bharat small reactors, R&D for small modular reactors, R&D for new technology in nuclear form a neat troika to alter the energy map of India. Specially on the nuclear side, it positions India to replicate the renaissance that nuclear is experiencing in the US. – Mayuresh Raut, Managing Partner, Seafund
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. Valuation assessments were never meant to fall within the purview of income tax officers, and this change eliminates those complications. This simplification allows us to focus on our primary job—investing in and supporting innovative startups—without the burden of navigating through cumbersome tax regulations.
As a venture capital fund, we see the Indian Budget 2024’s tax reforms as a major boost for the VC, PE, and startup ecosystem. The increase in LTCG tax rate for financial assets to 12.50% and STCG to 20% may pose challenges for listed investments. Still, it’s a significant advantage for other financial products like startups and Alternative Investment Funds. The reduction in LTCG tax from 20% to 12.50% for these investments will result in substantial savings and increased IRR, fostering growth and innovation. While we await the detailed budget, this move is a long-awaited positive development that will make India an even more attractive destination for global investors and drive further growth in the venture capital and private equity sectors. – Anirudh A Damani -Managing Partner – Artha Venture Fund
“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. It is key to establish India as an innovation hub and leader vs follower for new and breakthrough ideas. Focus of the budget is on sustainable growth with employment generation, of continuity and stability. The changes on the capital gains tax structure was unexpected, especially during a time when the fiscal position of the economy seems to be in check.