The 2024 Budget is soon upon us with two weeks to go. The Union Budget 2024-25 will be presented by Union Finance Minister Nirmala Sitharaman on February 1, 2024, at Lok Sabha. It will be an “Interim Budget” for the fiscal year commencing on April 1, 2024, and concluding on March 31, 2025. Last year, the Union Budget emphasized a boost for technology, green growth, infrastructure, and macro-economic stability & facilitated ample tax opportunities for citizens, especially youth, with a solid impetus for job creation. This year, numerous experts shared their opinions on what would benefit the Indian economy.
As India's logistics sector gears up for another year of growth, the 2024 budget stands as a pivotal opportunity to bolster its potential. We expect several key steps aimed at driving the sector's advancement. A greater focus on sustained investment in multi-modal infrastructure development is expected, with emphasis on dedicated freight corridors, inland waterways, and intelligent logistics parks to enhance efficiency and reduce costs. We also expect the upcoming budget to incentivize green initiatives, such as electric vehicles, green warehousing, and renewable energy adoption, aiming to reduce the carbon footprint and attract sustainable investments.
Since the logistics sector has long suffered from a skill gap, it is high time that this issue is addressed as well through targeted training programs and promoting digitization with AI-powered logistics platforms, paving the way for transparency and competitiveness. Streamlining regulations, simplifying GST processes, and providing tax breaks for logistics startups can also contribute to an improved ease of doing business. Moreover, special schemes and subsidies for MSMEs operating in the logistics sector can empower them to compete effectively, fostering overall sector growth.
As we approach the 2024 budget, the HR sector in India harbors specific expectations, particularly regarding policy reforms that currently pose challenges. A primary area of focus is the streamlining of labor laws, which were characterized as cumbersome, rigid, and difficult to follow. The sector thus anticipates reforms that would simplify these laws, making them more adaptable to the modern workplace, especially in terms of flexible working arrangements and remote work policies.
The segment could also benefit from the refinement of the Provident Fund (PF) and Employee State Insurance (ESI) schemes. The current structures of these schemes pose administrative challenges and often result in delayed contributions and settlements. An overhaul aimed at simplifying these processes could greatly enhance operational efficiency in HR management.
Moreover, the HR sector needs more supportive measures to nurture talent, specifically through enhanced tax incentives for employee training and development programs. This would encourage companies to invest more in upskilling their workforce, aligning with the evolving skill demands of the digital economy. Along with this, the expansion of tax benefits under schemes like Section 80-IAC, which currently has restrictive criteria, is desired to enhance accessibility to a broader range of startups.
In essence, the HR sector's pre-budget expectations for 2024 revolve around policies that reduce compliance complexity, foster talent development, and support startups through more inclusive and flexible fiscal incentives. These changes are crucial for creating a more dynamic and responsive HR landscape in India's rapidly evolving economic environment.
We have high hopes for the upcoming budget. This year should mark the next phase of growth for the semiconductor industry in India, focusing on unleashing the untapped potential of Indian entrepreneurs who are keen to pursue semiconductors and the embedded ESDM sector. They face four major entry barriers: high employee cost, high EDA cost, high fabrication cost, and high validation cost. These barriers hinder the exploration of the true potential of entrepreneurs in the semiconductor design space. Although the design-linked incentives launched last year were a welcome step, there is a need for a massive focus on providing risk capital to deserving startups, either through VC partnerships or direct government support. This will accelerate the semiconductor startup journey from India and enable them to compete globally and make a name for themselves and the country in the semiconductor design fab lab space.
"As we anticipate the upcoming Union Budget 2024, our expectations are aligned with the current global economic landscape. We foresee stability in corporate tax rates, considering that India's corporate tax rates are already in harmony with global standards. This consistency provides a conducive environment for business growth and international competitiveness. In the realm of personal income tax, we anticipate a positive move with an increase in tax rebates under the new regime. This foresight is driven by the potential for heightened personal consumption, fostering economic momentum and individual financial well-being. The government's commitment to fostering indigenous industries through schemes like PLI and Make in India, particularly in the IT and Tech sectors, is commendable. We look forward to the Budget building upon these initiatives, creating an ecosystem that propels innovation and self-reliance. In the context of international trade, we expect a thoughtful rationalization of import and export duties, taking into account existing and proposed Free Trade Agreements (FTAs). This strategic approach will further enhance India's global trade partnerships and economic resilience. It's essential to acknowledge that Budget '24 is an Interim Budget. While major proposals may not be expected due to the impending parliamentary elections, we anticipate a forward-looking stance that sets the stage for post-election economic policies. As stakeholders in the nation's progress, we eagerly await a budget that not only addresses immediate needs but also lays the groundwork for a robust economic future."
The IT sector foresees the 2024 Union Budget emphasizing digital infrastructure investments and providing incentives for research, skill enhancement, and nurturing innovation hubs. Hopes encompass augmented funding for cybersecurity, backing for cutting-edge technologies such as AI, IoT, and 5G, and revisions in tax policies to stimulate IT exports. Streamlined regulations for startups and increased focus on digital education initiatives are also expected. The industry aims for a favorable climate supporting growth, emphasizing improved business processes and global competitiveness, intending to solidify India's standing as a leading force in the global tech arena.
With the IT Services business taking a hit due to varying market conditions and the imminent impact of Artificial Intelligence on low-end programming, hiring has been significantly down for Software Engineers this year. Unfortunately, this is expected to continue. For almost 3 decades, the Indian education system has been focused on producing Engineers who go and take up jobs in IT industry. The Government should proactively promote incentives for Educational institutions to diversify their programs and for IT Product companies that can fill the imminent gap that will arise. Also, the accounting laws for IPR valuation can also be further clarified to help companies show that investment in the balance sheet rather than the practice for all investments to be written off without any benefit, showing up as accumulated losses. Valuing IPR can also help to raise funding and loans from banks as the network and reserves would then be favorable.
Amit Relan, Co-Founder and CEO of mFilterIt said, “Last year’s Union Budget had a significant mention of the advancements in technology and fostering the digital economy. For the upcoming budget announcement, we are expecting a significant share of focus on critical issues concerning data protection, cybersecurity, and digital infrastructure.
With the introduction of the data protection bill, we are expecting to see stride movements in the regulation of data privacy aligning with global standards, a cohesive policy framework to protect user privacy and also stimulate innovation in the digital economy. Alongside privacy and protection, we expect to see some wave movement around emerging technologies like AI and the nation’s take on leveraging its power to empower further digital advancements.
Focus on innovation and protection will strike the ideal balance to foster the digital infrastructure of the nation.”
Saurav Kasera, Co-Founder of Clirnet, said, “The Union Budget holds the potential to revolutionize healthcare accessibility in India's remote areas. Ongoing training and upgradation for all healthcare professionals are vital to a patient-centric system. A blend of incentives to make healthcare training more affordable and accessible can hold the key. These could include bringing healthcare education under a special GST category with lower or nil rates (currently no set-off available as medical services carry Nil GST), offering deductions in direct taxes for healthcare training expenses, and providing financial benefits/grants to institutions offering such training. Moreover, enhancing budget allocations for digital health infrastructure and telemedicine will ensure that quality healthcare reaches every corner of the country. Together, these initiatives promise to build a more robust, inclusive, and skilled healthcare workforce in India, ultimately leading to improved patient care and health outcomes across the nation.”
This budget would be a vote on account, hence there wouldn't be too much of an expectation from the present government. But because the election results seem to be predetermined towards a certain party, we hope that the present budget takes the good work forward. We hope the Climate Change budget is taken forward with more emphasis on nature-based Solutions. More job creation opportunities are shared in this process. And most importantly, technological advancements are encouraged in this sector which would not only help Bharat but also the world.
Speaking on the ‘expectations or recommendations for the Interim Budget 2024’ Anuj Arora, Co-founder & COO of SahiBandhu Gold Loans, said, “We anticipate the Interim Budget 2024 to align with the government's mission of uplifting the underprivileged and urge the government to introduce beneficiary schemes, especially as the General Sabha election approaches, focusing on the socio-economic empowerment of the marginalized. Acknowledging the FinTech and tech-based gold loan industry's pivotal role in reshaping financial services, we hope for policies supporting our growth, particularly in Tier 2, 3, and 4 cities, aiming to integrate rural communities into the formal banking system. Incentivizing FinTech dedicated to empowering SMEs through financial and technical interventions would mark a significant stride. Addressing loan disbursement, including loans against gold/jewelry, we recommend regulations fostering collaboration between traditional banks and digital lenders for accessible loans. With the budget on the horizon, SahiBandhu Gold Loans, the largest gold loan aggregator platform, eagerly anticipates a budget that propels innovation and inclusion in the rapidly evolving FinTech and gold-tech landscape."
“FedEx advocates for a strategic allocation towards infrastructure development for more efficient multimodal logistics. Additionally, we emphasize a focus on digitization in the logistics sector to accelerate speed and ease of doing business. Recognizing the impact of the National Logistics Policy and PM Gati Shakti National Master Plan, alongside prioritizing road, sea, and rail cargo infrastructure, we see the expansion of airports as exciting avenues for growth."
"We urge a consistent budgetary emphasis on expanding airport infrastructure for cargo, strengthening regional airports and developing dedicated transshipment hubs to optimize belly and freight capacities. We underscore the importance of digitally advancing customs clearance processes through cutting-edge technologies such as artificial intelligence, machine learning, blockchain, and big data. This approach promises improved risk management, compliance, efficiency, and analytics."
"As India targets lowering of logistics costs and a top 25 global rank by 2030, we anticipate budget initiatives that will sustainably boost manufacturing and trade, particularly benefiting and incentivizing SMEs. We also anticipate initiatives towards greater trade facilitation and further fostering a business-friendly environment aligning with the USD 5 trillion economy goal.”
"The upcoming interim budget offers a unique opportunity to balance economic growth priorities and fiscal consolidation. Prioritizing capital expenditure in key infrastructure projects, alongside financial incentives like PLI, tax benefits, and subsidies, can drive innovation in logistics. Building a 'One India' logistics ecosystem and integrating initiatives like the National Logistics Policy and Sagarmala Project are crucial to enhancing India’s global Logistics Performance Index ranking.
To reinforce India's potential as a manufacturing powerhouse, the budget needs to focus on domestic manufacturing and prepare the logistics sector for service integration, growth in fulfillment logistics, and multi-modal transportation adoption. The government should also consider automation investments, especially in technologically advanced warehouses, which can position India as a logistics innovation leader.
We anticipate government announcements for the EV industry, which may include tax incentives, charging infrastructure subsidies, and financial support for R&D. A holistic regulatory framework for last-mile delivery and formal recognition of the gig workforce under labor laws are essential for fair employment practices in the digital economy. A forward-thinking budget aligned with these expectations will enhance the logistics sector and contribute to India's global competitiveness and economic prosperity".
