Budget 2024 Expectations Highlights: Need incentives, infra support for pharma sector, says Granules India chief

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"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," said Amit Prasad, Founder and CEO, SatNav.

"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," Amit Relan, Co-Founder and CEO, mFilterIt said.

"The Indian government needs to implement focused strategies. These include creating innovation zones offering incentives and infrastructural support, encouraging public-private partnerships to combine expertise and resources, and boosting funding for advanced drug research and development. Streamlining regulatory pathways to expedite approvals for novel treatments and investing in educational initiatives to develop a workforce adept in pharmaceutical innovation are also key. These initiatives are expected to usher in a new age of Indian pharmaceutical leadership, characterized by groundbreaking R&D," Granules India Chairman and Joint MD Krishna Prasad Chigurupati said.

With an 87 percent adoption rate in India, the Fintech industry is growing at an astonishing rate, which calls for deliberate efforts to maintain growth, TradeSmart CEO Vikas Singhania said, adding that given the industry's contribution to financial inclusion, the budget should improve ties between Fintechs and conventional banks "Focused initiatives to assist the 70 million micro-scale businesses, which account for a large share of non-farm employment, should be given top priority in the budget," he further stated.

- Edtech firms express hope for potential tax incentives and benefits in the interim budget. They contend that a decrease in Goods and Services Tax (GST) rates on digital educational content and services could enhance the affordability of online learning, proving advantageous for both students and edtech companies.

- The government may extend the concessional 15 percent income tax rate for corporates to set up new manufacturing units by one year till March 31, 2025, to encourage private investments, EY said in its 2024 Budget expectation report.

- Telecom infrastructure providers are seeking availability of input tax credit on telecom towers, and have made a plea for an increase in tax depreciation rate and rationalisation of TDS provisions in their Budget wishlist.

- The players under the aegis of Digital Infrastructure Providers' Association (DIPA) said measures to facilitate ease of doing business will increase investment and contribute to the industry's long-term growth.

- Economists predict that Finance Minister Nirmala Sitharaman might unveil a target of approximately 5.3 percent of GDP for the 2024-25 fiscal year during the upcoming interim budget.

- The government is on the brink of a transformative shift in its flagship health scheme, Ayushman Bharat, with plans to potentially double insurance cover under the Pradhan Mantri Jan Arogya Yojana (PM-JAY) to Rs 10 lakh from Rs 5 lakh.

- This move aims to include coverage for critical ailments like cancer and transplants, acknowledging the increasing financial burden associated with these medical conditions.

- All India Gaming Federation Spokesperson Roland Landers said, "There have been significant regulatory strides in the online gaming sector, and we anticipate progressive allocations to be made towards the sector in the upcoming union budget, including towards the implementation of IT Rules for online games and the establishment of self-regulatory bodies."

- "Additionally, we look forward to budgetary allocations aligned with the AVGC policies, in line with the recommendations of the AVGC Task Force's report from the Ministry of Information and Broadcasting," he added.

- Finance Minister Nirmala Sitharaman is expected to intensify measures to stimulate consumption and support the rural economy while maintaining control over inflation in her upcoming presentation of the sixth consecutive budget on February 1.

- Experts said one way to boost consumption is to put more money in the hands of people, and one of the possible ways of doing it is by reducing the tax burden through tinkering with tax slabs or increasing the standard deduction.

- The agriculture sector stood strong during the coronavirus pandemic, growing by 5.1 percent on average in 2019-20 and 2020-21.

- If not for the farm sector, the economy would have contracted by far more than the average 1 percent in each of the two aforementioned years.

- As the government endeavors to decrease the fiscal deficit to 4.5 percent by FY26, analysts predict that the BJP government will emphasize infrastructure spending in line with the goal of reducing the fiscal deficit from the FY24 target of 5.9 percent of GDP.

- Experts propose that the government's belief in the possibility of re-election is likely to prevent them from implementing populist measures in the Interim Budget, enabling a sustained emphasis on investments in infrastructure.

- For the third year in row, the government's gross tax collections are set to post double-digit growth rate in 2023-24. More importantly, the rise in tax mop-up so far this year has been more than expected.

- The Budget for 2023-24 had estimated that gross tax collections would amount to Rs 33.61 lakh crore this year, 10.4 percent higher than the revised estimate for 2022-23. But as per latest data, thetax collected in the first eight months of the yearhas been nearly 15 percent more than what the finance ministry had managed to mop up in April-November 2022.

- India’s energy sector is expecting the upcoming budget to keep cleaner fuels such as green hydrogen and natural gas at the forefront.

- The oil and gas sector expects some reforms for city gas distribution (CGD) players to boost the consumption of natural gas in the country.

- The Government of India will target a lower deficit in the 2024-25 fiscal year despite lifting capital expenditure to an all-time high, according to a Reuters poll of economists who said infrastructure investment would be a priority.

- Being an election year, the budget is expected to strike a balance between populist measures and fiscal prudence.

- The funding for the government's flagship initiative, the Pradhan Mantri Awas Yojana (PMAY), saw a 66 percent increase to Rs 79,000 crore for fiscal 2024.
- Of this amount, Rs 25,103 crore has been specifically designated for PMAY Urban, hastening the implementation of the Housing for All program.
- The eagerly-awaited adjustments in direct tax benefits and modifications to income tax slabs were anticipated to inject additional funds into the hands of middle-class households, thereby positively affecting their spending capacity and savings.
- Additionally, Finance Minister Sitharaman announced the establishment of an Urban Infrastructure Development Fund, modeled after the Rural Infrastructure Development Fund, to be overseen by the National Housing Bank.
- She further stated that all cities and towns would be facilitated for a complete transition of sewers and septic tanks from manhole to machine-hole mode.

Kshitish Chandra Neogy (KC Neogy), the second finance minister of independent India, holds the distinction of being the only finance minister in India who did not present a Union Budget. His tenure lasted for only 35 days, during which he resigned from the Congress party along with Shyama Prasad Mukherjee.

- Over the past decade, there has been a significant surge in the agricultural output of the country, increasing from 129.32 million tonnes in FY14 to 330.5 million tonnes in FY23.
- In terms of value, agricultural exports also reached a historic high of $50 billion in FY23, compared to $37.29 billion in FY14.
- Concurrently, the budget allocation for the agricultural sector witnessed a fivefold rise, escalating from Rs 22,652 crore in FY15 to Rs 1.15 lakh crore in FY24.

- There is widespread speculation that the central government is contemplating an increase in the annual cash transfer within the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, raising it from Rs 6,000 to Rs 8,000.
- The robust expansion of the agricultural sector holds significant importance for the Indian economy, constituting approximately 15 percent of the overall economy and employing a substantial percentage of the workforce.
- Inadequate production can potentially contribute to food inflation, as was observed in mid-2023.

- The oil and gas industry eagerly awaits reforms, especially in city gas distribution (CGD), to enhance natural gas consumption. Concurrently, the power sector is hopeful for initiatives that will further encourage the adoption of renewable energy sources.
- Anticipating the budget announcement, the oil and gas sector expects the finance minister to allocate funds towards advancing the green and sustainable energy sector. - Key expectations involve proactive measures in providing incentives to boost manufacturing and research and development hubs, coupled with a decrease in GST rates. - Companies in this sector are also looking for a reduction in basic customs duty on solar cells and advocating for reduced duties on electrolysers and battery components. - The thermal energy sector is urging increased investments in rail infrastructure and the operationalisation of commercial mines.

- "Green energy will need to be emphasised and promoted through policy so that the momentum is sustained. We have made a promising start with solar and wind, both of which still need to attain greater viability prospects," noted RPG Chairman Harsh Goenka.
- "Sustainability in general will need to get supported through the budget both in terms of incentives and also tax policy so that companies are encouraged to embrace sustainable practices and also innovate their products and services to meet global standards," says Goenka.
- "The budget must focus on India’s commitment to green energy and give a push to Green Hydrogen production, and carbon offsets," he remarks.
- "I expect the FM to continue the allocation for railways’ capacity enhancement, rail safety and Mission Raftaar," Goenka further added. Find out more what the RPG Chairman anticipates from the interim budget.

- The Global Trade Research Initiative (GTRI) report released on January 22 suggests that, in the upcoming Budget, it would be unwise for the government to reduce import duties on electronic components essential for smartphone production.
- The existing tariff framework has demonstrated success, and altering it may negatively impact local manufacturing, according to the report.
- The GTRI emphasises that sticking to the current rates is crucial for fostering a balance between industry growth and long-term development within India's expanding smartphone market.

Introduced in 1973 for fiscal 1973-74, the Black Budget was presented by Finance Minister YB Chavan. The nomenclature "Black Budget" stemmed from its noteworthy Budget deficit (fiscal deficit) of Rs 550 crore, which marked the highest at that time. This deficit aimed to offset the expenses incurred during the 1971 Bangladesh war, the impact of the Arab embargo on oil, and the adverse effects of a deficient monsoon.

- The Interim Budget of 2024 is expected to give priority to rural and urban connectivity, railways, ports, aviation, and highways, recognising their significant impact on growth and employment.
- The National Highways Authority of India (NHAI) is expected to persist in its focus on reducing external debt through asset monetisation, BOT mode project awards, and increased budgetary spending.
- CARE Ratings anticipates a 20 percent year-on-year increase in budgetary allocations for the roads and highways sector in the Union Budget of 2024-25.
- Tax relief on capital gains and interest income from Infrastructure Investment Trusts (InvITs) could stimulate investor interest in InvITs, unlocking the asset monetization potential for the roads sector.
- ICRA predicts a 16-21 percent year-on-year increase in road execution activity, reaching 12,000-12,500 km in FY24, which falls short of the government's target of 14,000 km.

- In the fiscal 2024 budget, the finance minister allocated approximately Rs 10 lakh crore for infrastructure capital expenditure, marking a 33 percent increase from the previous year.
- There is an anticipation within the industry that the government will place a heightened emphasis on safety and timely upgrades to the country's infrastructure.
- Despite government assurances regarding infrastructure development, there has been a delay in execution.
- During the first eight months of FY24, the Ministry of Road Transport and Highways awarded projects for the construction of 2,816 km of roads, a decline from the 5,382 km awarded in the same period in 2022-23.

- The National Pension System (NPS) might be rendered more appealing by the government through the extension of tax benefits on contributions and withdrawals, particularly targeting senior citizens aged 75 and above.
- The Pension Fund Regulatory and Development Authority (PFRDA) is advocating for tax parity with the Employees' Provident Fund Office (EPFO) concerning employer contributions.
- It is anticipated that announcements related to this matter will be included in the upcoming interim Budget.
- To encourage long-term savings through NPS and alleviate tax burdens for senior citizens aged 75 and above, Deloitte's Budget expectations propose making the annuity portion of the NPS tax-free for individuals in this age group.

- In the financial year 2023-24, the Ministry of Health and Family Welfare has allocated a substantial amount of Rs 89,155 crore, marking a noteworthy 13 percent rise from the revised estimates of 2022-23.
- It is noteworthy that 97 percent of this allocation is designated for the Department of Health and Family Welfare, receiving Rs 86,175 crore, while the Department of Health Research is allotted Rs 2,980 crore.
- In the preceding fiscal of 2022-23, a significant portion of the Ministry's budget, 33 percent, was directed towards the National Health Mission (NHM). The second-highest allocation, comprising 19 percent amounting to Rs 17,323 crore, was allocated to regulatory and autonomous bodies.
- The Pradhan Mantri Jan Arogya Yojana (PMJAY) insurance scheme is set to receive a projected allocation of Rs 7,200 crore, indicating a 12 percent increase from the revised estimate of 2022-23.
- Furthermore, the funding for the PM Ayushman Bharat Health Infrastructure Mission (PM ABHIM), aimed at establishing primary health infrastructure, has seen a substantial 123 percent increase from Rs 1,885 crore in 2022-23 RE to Rs 4,200 crore in 2023-24 BE.

- The healthcare industry in India is poised for a renewed focus on regional healthcare and the implementation of new initiatives to strengthen its global position as the leading pharmacy hub in the upcoming 2024 Budget.
- The Indian Pharmaceutical Alliance, representing major pharmaceutical manufacturers in India, has recommended that the 2024 Budget should expedite the progress of life sciences innovation and research and development (R&D).
- They highlighted the Indian pharmaceutical sector's goal to reach a market size of $120–130 billion by 2030 and $400–450 billion by 2047, considering the current size of the domestic pharma market, which stands at around $50 billion.

Former Prime Minister Morarji Desai holds an intriguing record for having presented the highest number of budget proposals in India's history.
Serving as the finance minister from 1962 to 1969, he delivered a total of 10 budgets. This surpasses the contributions of P Chidambaram (9), Pranab Mukherjee (8), and Yashwant Sinha (8) during their respective tenures.

- The economic contribution of agriculture has decreased, while its share in employment remains unchanged - leading to a situation where the economy has not generated sufficient employment opportunities, resulting in widespread poverty.
- In a bid to address the plight of farmers, the government introduced a policy to double their income.
- A dedicated committee was established, and it submitted a comprehensive 14-volume report outlining strategies to achieve this goal.
- The Centre implemented a range of policies, reforms, and programs in pursuit of this objective.
- According to data, the average monthly income per agricultural household saw a significant 59 percent increase, rising from Rs 6,426 in 2012-13 to Rs 10,218 in 2018-19.
- The Finance Minister could provide an update on recent figures and chart a course for further agricultural reforms.

- As per the PLFS 2017-18 findings, India's youth unemployment rate significantly exceeded that of the overall population.
- While the nationwide unemployment rate for the entire population stood at 6 percent, it soared to 18 percent among the youth.
- In the PLFS 2022-23, although the overall unemployment rate has decreased to 3.2 percent, the disparity between the overall and youth rates remains unchanged.
- The youth unemployment rate for 2022-23 is still high at 10 percent, with rural and urban youth facing rates of 8 percent and 15.7 percent, respectively.

- The Niti Aayog recently unveiled the multidimensional poverty index, revealing a reduction in the poverty ratio from 25 percent in 2015-16 to 15 percent in 2019-20, allowing nearly 13.5 crore people to escape poverty during this period.
- Despite this positive trend, the government has committed to providing free grains to 81 crore people for the next five years.
- While the Budget may not focus specifically on poverty estimates, the Finance Minister's speech could bring some clarity to the ongoing poverty debate.
- A more detailed understanding of poverty trends would assist future governments in targeting programs effectively.
- Additionally, the FM's speech might prompt the release of the long-awaited Consumption Expenditure Survey, crucial for computing the Consumer Price Index, whose base year has remained unchanged since 2011-12.

- This impending budget holds significance as it will be the last one passed by the central government before the upcoming general elections, with widespread expectations for the finance minister to introduce populist measures.
- The comprehensive budget for fiscal 2024-25 will be presented after the formation of the new government following the elections.