Economic Survey 2024 Highlights: Food Inflation Is A Concern Amid Extreme Weather Conditions
Budget 2024 Highlights: Please follow this space for all the latest updates related to the upcoming presentation of the Union Budget 2024 by Finance Minister Nirmala Sitharaman
Chander Shekhar Sibal, Senior Vice President and Head of Healthcare Business at FUJIFILM India, expressed optimism regarding the 2024 budget and its potential to bolster the healthcare sector. Emphasising the importance of tax incentives for research and development in healthcare, he highlighted their potential to stimulate innovation and advance the development of state-of-the-art diagnostic and therapeutic solutions.
Sibal also underscored the value of public-private partnerships, suggesting they could synergise resources and expertise from both sectors, ultimately enhancing healthcare delivery and infrastructure nationwide.
Murthy Nagarajan, Head of Fixed Income at Tata Asset Management, states that the Economic Survey aims for GDP growth between 6.5 per cent and 7 per cent this year, aligning with RBI projections of CPI inflation at 4.5 per cent and 4.1 per cent for the current and upcoming years, respectively. "They are targeting a GDP growth rate of 6 per cent on a long-term basis which converts into a nominal GDP growth rate of 9.5 to 10.5 per cent. Public debt to GDP ratio is expected to come down in the coming years due to a higher nominal growth rate," Nagarajan said.
AR Ramesh, CEO of TeamLease Degree Apprenticeship, commented on the economic survey released today and said that India's economic engine is running at full throttle, buoyed by a strong GDP growth rate of 7-8 per cent, paving the way for a prosperous "Viksit Bharat" by 2047.
"To leapfrog into this new era, India must blend the confluence of skills and education, emphasising the development of creativity, critical thinking, problem-solving, and complex communication skills that augur well with AI's capabilities. By prioritising skill-based education and investing in human capital, India can ensure a workforce that is agile, skilled, and poised to capitalise on the transformative opportunities presented by AI and automation," he added.
Mukul Goyal, Co-Founder of Stratefix Consulting, expects the Union Budget 2024 to introduce substantial initiatives aimed at fostering workforce development and promoting job creation within India's MSME sector. "The budget should allocate significant funding for upskilling and reskilling programs, particularly in automation, artificial intelligence, and data analytics. Providing future-ready skills will enhance employability and foster creativity in MSME workforces," he added.
The economic survey 2024, released on Monday, highlighted that the Indian e-commerce industry is expected to surpass the $350 billion mark by 2030. It also states that the number of technology start-ups in India rose from around 2,000 in 2014 to approximately 31,000 in 2023. The number of Global Capability Centres (GCCs) in India has also grown substantially, from over 1,000 centres in FY15 to 1,580 centres by FY23.
Vivek Jalan, Partner at Tax Connect Advisory Services LLP, highlighted that the Indian economy remains robust, with real GDP estimated to have grown by 8.2 per cent in FY24. Notably, this strong growth followed growth rates of 9.7 per cent and 7.0 per cent in the preceding years. "India seems set for becoming the third Largest Global Economy very soon as per the vision of the Prime Minister," he said.
"However, this vision cannot be achieved unless the MSMEs are propelled forward, as they remain the chief employment generator and GDP driver for India," Jalan added.
Over the past five years, India's coal production has significantly accelerated, resulting in reduced dependency on imports. In the fiscal year 2024, India's coal production reached 997.2 million tonnes, while imports amounted to 261 million tonnes. The total coal consumption in the country for the same period was 1233.86 million tonnes.
The survey highlights that food inflation has been a global concern over the past two years. Within India, the agriculture sector faced challenges due to extreme weather events, depleted reservoirs, and crop damage, which impacted farm output and food prices. Consequently, food inflation stood at 6.6 per cent in FY23 and increased to 7.5 per cent in FY24
In the fiscal year 2024, the central government's timely policy interventions, combined with the Reserve Bank of India's measures aimed at ensuring price stability, played a crucial role in keeping retail inflation steady at 5.4 per cent. This marked the lowest inflation rate observed since the onset of the pandemic, according to the report.
India's services sector continued to record a strong growth rate in FY24, the survey stated. The sector now contributes to nearly 55 per cent of the overall size of the economy. The provisional estimates of the survey noted that the services sector grew by 7.6 per cent in FY24. The Purchasing Managers' Index (PMI) of the services sector surpassed 50 ever since August 2021, indicative of the regular expansion seen in the sector for the last 35 months.
Indian labour market indicators have improved over the past six years, with the unemployment rate declining to 3.2 per cent in the fiscal year 2022-23, as reported in the Economic Survey. "The Indian labour market indicators have shown improvement over the past six years, with the unemployment rate declining to 3.2% in the fiscal year 2022-23, as reported in the Economic Survey," it added.
The external sector of the country remained strong as geopolitical headwinds coupled with inflation acted as obstacles to growth. The services exports of India climbed by 4.9 per cent to touch $341.1 billion in FY24, as IT/software services along with other business services contributed to growth.
The economic survey highlighted that the GDP growth rate for the country remained at a steady level in the 2023-24 fiscal year (FY24). The real GDP of India grew by 8.2 per cent in FY24, surpassing 8 per cent in three quarters in the fiscal. The survey pointed out that the outlook for the 2024-25 fiscal year (FY25) remained robust, subject to risks relating to factors such as geopolitics, financial market, and climate change.
As we step closer to the Union Budget 2024, experts hope for some tax relief for the public. Mahesh Krishnamoorthy, MD, Core Integra, shared that the basic expectations from the Budget include an increase in the exemption limits to Rs 5 lakh, along with a simplification in tax slabs. "Sec. 80C limits could be enhanced to at least 3 lacs from the current 1.5 lacs. Interest limits on housing loans and principal repayments could be enhanced further. Income Tax Returns could be simplified for Employees who have no other source of income other than salary, the submission by Employer along with TDS as applicable must be considered as auto filing of returns," the executive noted.
Finance Minister Nirmala Sitharaman tabled the Economic Survey in the Parliament on Monday. The survey details the economic progress in the 2023-24 fiscal year and sets the focus points for the Budget ahead.
Avneet Singh Marwah, CEO of SPPL and an exclusive brand licensee of Thomson in India, emphasised the pivotal role of the Union Budget 2024 in preserving India's position as the world's third-largest economy. With India contributing $3.7 trillion to the global economy out of $100 trillion and boasting the largest population of young individuals, Marwah highlighted significant untapped potential. He stressed the importance of stimulating consumption to unleash this potential.
"Drawing on the successful implementation of GST reforms, an anticipated reduction in the GST rate for LED TVs larger than 32 inches, from the current 28 per cent to 18 per cent in Budget 2024, is expected," he added.
The country gears up for the Budget Session to begin today and prominent leaders arrived in the Parliament. The Economic Survey is scheduled to be tabled today by FM Sitharaman. Congress MP and Leader Of Opposition in Lok Sabha, Rahul Gandhi, also arrived to attend the Session.
The Union Budget, Srinivasa Addepalli, Founder and CEO, GlobalGyan Leadership Academy, said, should focus on addressing the skill gap in the workforce. The executive said that the government should provide support in the form of incentives from internships and apprenticeships to help increase the practical skills in the workforce. “Encouraging investments in skill certifications and leadership development programs through tax relief measures can significantly boost individual and enterprise readiness for future challenges,” Addepalli noted.
Prime Minister Narendra Modi urged the Opposition to "rise above politics" in an appeal made on Monday, July 22, ahead of the Budget Session. In a post on X (formerly Twitter), he shared his thoughts, stating, "Sharing my thoughts at the start of the Budget Session of Parliament."
The real estate industry anticipates the government to continue its push for investment in infrastructure. Sandeep Jain, CFO, NDR InvIT Managers, said that measures such as tax incentives and streamlined regulatory processes can greatly help the InvIT sector in bringing in more investors and contribute to the country's infra goals. "Increased investment in infrastructure projects, particularly in renewable energy, transportation, and logistics, will not only drive economic growth but also create jobs and improve overall connectivity. While the government has taken various steps to strengthen India’s infrastructure and logistics sector, there is also a need for GST rationalization. Additionally, more emphasis on boosting consumption will further support the growth of these sectors," Jain added.
Ahead of the Economic Survey release, the stock markets traded on a nearly flat note. As of 9:57 AM, the BSE Sensex touched 80,565.68, slipping nearly 40 points, and the NSE Nifty stood at 24,514.15, falling almost 17 points.
Real estate developers in Noida and Greater Noida in western Uttar Pradesh expect the first Budget of the Modi 3.0 government to accord 'industry status' to their sector for easier access to funds, and address woes related to GST, including the 28 per cent taxation on cement. Hoping for "nuanced approach" to real estate woes, the developers seek the government's support beyond fiscal incentives, with the upcoming Budget focussing on enhancing transparency and efficiency through a robust regulatory framework, streamlined approvals process.
Industry body CREDAI's western UP Secretary Dinesh Gupta said boosting the real estate sector with tax incentives, improved tax structures, and a single-window clearance policy will encourage further investment from both domestic and foreign sources.
As the FM presents the Economic Survey today, experts across sectors feel that the upcoming Budget will set a path of economic growth and continue with the reform policies ahead. The education sector specifically hopes that infrastructure development and digital learning environment in the industry will remain a priority in the Budget.
Viranica Manchu, Founder and Director, New York Academy, Hyderabad, noted, “We urge the government to streamline visa processes and regulatory frameworks to attract and retain global talent, which is vital for our diverse learning environment. Investments in digital learning tools and technology integration will further empower our students to excel in an interconnected world.”
The Budget Session begins today in the Parliament. Finance Minister Nirmala Sitharaman will table the Economic Survey today and set the scene for the Budget presentation scheduled for tomorrow.
Vijay Dewan, MD, Apeejay Surrendra Park Hotels Ltd, said that the government should introduce the urban employment guarantee scheme. The executive called for the Budget to grant infrastructure status to hotels to lure in private investments for the industry. "A new incentive scheme needs to be announced for additional job creation in the labour intensive sectors. Visa free arrival for travellers from top source markets will make India emerge as a leader in the tourism industry. Tax rates need to be rationalised and reduced in lower income group to boost consumption," Dewan noted.
The finance sector expects the upcoming Budget to push for an increase in spending on infrastructure and implement policies that help enhance investor confidence. Chakrivardhan Kuppala, Cofounder and Director, Prime Wealth Finserv Pvt Ltd, said that the government can enforce policies focused on regulatory clarity, tax incentives, financial literacy, along with sustainable growth via ESG investments in the Budget.
The Ayushsector remains hopeful of receiving a special push in the Budget 2024 to develop the health practices in the sector more efficiently. Vaibhav Jain, CEO, Aayush Bharat, noted that the Aayush-based healthcare and wellness sector is anticipated to touch $70 billion by next year.
"We urge the next Finance Minister to introduce a special package to bolster the Ayushsector in the upcoming budget. With this, Aayush infrastructure, research, and accessibility can be improved greatly. In addition, we hope that Ayush products will receive subsidies and that there will be incentives to support Ayushstartups," Jain added.
Bishwadeep Ghose, Country Director, Water for People, India, said that the country needs to continue working toward making drinking water easily accessible for all. The executive urged the government to ensure that funds are allocated in the upcoming Budget for the upkeep and operations of new piped water systems to help secure their operational efficiency and maintain a consistent supply of drinking water.
"Additionally, to address the challenges posed by climate change and extreme weather events on water resources, strategic investments in water management are essential to water sustainability and security in urban and rural settings. Effective management of drinking water and agricultural water use is vital as they rely on common groundwater resources. Targeted investments in demand management are crucial to achieving this balance. These budgetary allocations will not only sustain our progress but also secure India’s long-term water security and resilience," Ghose stressed.
The Union Budget is being eagerly awaited by the country. Several industries are hoping for a push for favourable policies to capitalise on the country's economic growth. The solar industry is hopeful that the government will work towards the renewable energy goals and promote the people to adopt solar energy. N P Ramesh, COO and co-founder, Orb Energy, noted, "The removal of anti-dumping duties on raw materials for solar modules is crucial to enhancing manufacturing competitiveness and reducing dependency on imports. Additionally, a proposed 7-year tax holiday for investments in PV module or solar cell production will stimulate domestic manufacturing capabilities, fostering job creation and economic growth."
The MSME sector can benefit from a boost in infrastructure and an expansion in the production-linked incentive (PLI) schemes, industry experts stated. Hardika Shah, founder and CEO, Kinara Capital, added, "Expanding the scheme to include more sectors will have a broader impact, particularly in Tier 2 and Tier 3 cities. Increased domestic manufacturing across various sectors will create new demand for goods and services that MSMEs can effectively meet. Strengthening this sector with dedicated focus can yield far-reaching benefits."
Sharing hopes of the education sector, Prajodh Rajan, co-founder and Group CEO, Lighthouse Learning, said that the industry is hopeful of a major allocation for the education sector. The executive said that teacher training and development programmes should be in focus in the Budget and attention should be paid to strengthening the digital infrastructure.
"Focus should be placed on improving early childhood education infrastructure, which includes establishing more high-quality preschools, particularly in underserved communities," Rajan added.
In anticipation of the Union Budget, the Tech Entrepreneurs Association of Mumbai (TEAM) said that the hopes remain for a significant push for the domestic start-up ecosystem in the upcoming Budget. The body urged the government to push for more funding access via seed funding initiatives and easy availability of venture capital for the start-ups in the country.
"Streamlining regulatory processes and offering tax incentives, such as extending the tax holiday for startups from three to five years, will provide much-needed relief. Investment in digital infrastructure, particularly in underserved areas, and focused skill development programs for AI, renewable energy, and deep tech are essential. Collaboration between private and public sectors in these skill development initiatives will ensure a robust talent supply chain," TEAM pointed out.
Aastha Dhowan, Partner, N.A. Shah Associates, shared that the upcoming Budget should focus on simplifying the capital gains tax system by unifying tax treatments for several securities and easing out indexation provisions that should facilitate in the long-term goal of making laws easy for the common man.
There are uncertainties surrounding the Union Budget as many fear the government might turn populist in the aftermath of the recently conducted general elections. However, Deepak Jasani, Head of Retail Research, HDFC securities, negated these worries and said, "We feel that the recent announcements of ministerial appointments and modest MSP hikes negates such a fear. The Govt is likely to shun the race of competitive populism through handouts and is not likely to abandon the path of fiscal prudence although it may make extra efforts to win over a larger population of rural and urban poor by incurring targeted social welfare spends."
The analyst remained optimistic that the Budget might bring in more benefits for foreign-domiciled Indian start-ups to help lure their corporate headquarters back to India throught the special economic zone of GIFT City.
The insurance industry hopes that the upcoming Budget will push ahead the agenda of achieving 'Insurance for All' by 2047. Dhirendra Mahyavanshi, co-founder and CEO, Turtlemint, expressed, "We anticipate provisions such as composite licenses, enhanced capital frameworks, and streamlined regulations that foster innovation while ensuring policyholders' interests are safeguarded. These reforms are poised to unlock new opportunities in micro-insurance, agriculture coverage, and regional initiatives, reinforcing the industry’s commitment to customer-centric innovations."
Affordable housing remains one of the most prominent agendas for the economy. Deepak Patkar, MD and CEO, SMFG Grihashakti, urged the government to consider re-alignment of affordable housing choices in several towns and cities. "There is also a need to appropriately incentivise developers to increase the supply of affordable green housing. Given the success of earlier PMAY scheme, we eagerly await the revised contours of the PMAY-U 2.0 scheme which promises to focus on improved targeting of beneficiaries and provide timely disbursement to completed homes," the executive noted.
The Budget Presentation is scheduled on Tuesday in the week. The MSME sector expects the Union Budget to focus on improving credit access for the industry. Arun Kumar Nayyar, CEO and MD, NeoGrowth Credit, noted, "Timely access to credit remains a significant challenge for MSMEs. Non-Banking Financial Companies (NBFCs) play a crucial role in reaching underserved and unserved segments. Therefore, creating an enabling environment through increased funding and regulatory reforms is essential."
The recent NeoInsight Study by NeoGrowth, titled 'MSME Business Confidence Study 2024', found that 82 per cent of MSMEs intends to adopt new digital tools in the year. Skilling initiatives by the government can further help these entities in upgrading digitally and boosting their operations, Nayyar added.
Background
Budget 2024 Highlights: Hello and welcome to ABP Live's Budget 2024 LIVE blog. Please follow this space for all the latest updates on the upcoming Budget Session and news around it.
Union Minister Nirmala Sitharaman is scheduled to table the Union Budget for the 2024-25 fiscal year (FY25) this week on July 23. This budget presentation will be the seventh consecutive Budget for the Finance Minister and the first complete budget for Prime Minister Narendra Modi’s third term in office.
The Budget will be keenly observed by the common public, along with industry executives and experts. The Budget Session will begin on Monday and will last till August 12, 2024. The Economic Survey will be released on July 22, a day ahead of the Union Budget presentation. The survey aims to provide a thorough analysis of the economy over the last year and sets the foundation for the incoming Budget.
The live telecast of the Budget will be done via several government channels, such as Doordarshan, Parliament channels, and the Government of India’s YouTube platform. The event will also be covered by Sansad TV. The official website, www.indiabudget.gov.in, will provide users access to the online viewing link and all the key documents related to the Budget will be uploaded here.
Experts anticipate the Budget to focus on tax simplification and a reduction in the GST slabs to aid the corporate sector in the country. Anirudh A Damani, Managing Partner, Artha Venture Fund, noted that the government should look into setting up a business bank to cater to SMEs and start-ups in the country as the traditional banking system fails to cater to the unique needs of these entities.
Mahesh Ramamoorthy, Chief Information Officer, YES Bank, pointed out that the economy needs to boost innovation to attract and retain the top tech talent in the country. The executive said that the government can achieve this by providing policy support and funding for technology initiatives and reskilling programmes.
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