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"The growth of the Indian NBFC industry is significantly influenced by robust financial inclusion, consumer demand, and improving trade balances. The upcoming Union Budget should emphasize enhancing financial inclusion across the country, implementing policy reforms, supporting Production-Linked Incentive (PLI) schemes, and reinforcing digitalization efforts to sustain the sector's growth. Financial and digital inclusion will enhance credit access by increasing convenience and reducing turnaround times. Furthermore, MSMEs are the driving force behind India's economic growth and prosperity. To fully unlock their potential, the Union Budget should prioritize measures to improve access to liquidity, skill development, and ease of doing business for small enterprises. Strengthening the digital infrastructure for MSMEs will also enhance their creditworthiness and contribute to the industry's growth. This focused approach will ensure the sustained growth of both the sector and the overall Indian economy," says Rakesh Kaul, CEO, Clix Capital.

"As we approach the Union Budget 2024, we are optimistic about its potential impact on the agriculture industry. We foresee substantial budget allocations aimed at accelerating technology adoption, boosting productivity, and improving storage infrastructure within the sector. Such measures are expected to provide significant benefits to farmers, agricultural machinery owners, and OEMs alike.

Farmers are our ‘annadatas’ and continue to be major drivers of India’s economic growth. Players across the agri-tech and agrochemical spectrum are also boosting this industry by prioritizing technological advancements. At Crystal Crop, we are expanding the scope of crop protection in the pesticide, insecticide, herbicide, biological, seed, and agri equipment segments through cutting-edge R&D practices. We expect initiatives to enhance agriculture productivity per hectare and increase employment opportunities for India’s young, talented population.

Furthermore, we fully support the government in their quest for developing Aatmanirbharta in agriculture and adopting technology with schemes that promote gender diversity,” said Ankur Aggarwal, Managing Director, Crystal Crop Protection Limited.

“As the Union Budget 2024 approaches, the oil and gas sector is poised for transformative changes. The focus on boosting exploration, fostering green hydrogen, and increasing gas consumption aligns with global energy trends. The industry's call for incorporating gas under GST highlights the need for regulatory reforms to stabilize prices and attract investments. Investment in infrastructure, particularly in energy, logistics, and gas pipelines, is crucial for achieving the target of a 15% gas share in the energy mix by 2030. The emphasis on alternative fuels, such as compressed biogas, and a grid system framework akin to solar energy will accelerate decarbonization goals.

With the nation's net-zero target by 2070 in mind, we expect Budget 2024 to prioritize energy transition practices," said Mr. Rahool Panandiker, Managing Director and Senior Partner, BCG.

The Indian retail sector stands at a critical juncture, seeking support from the Govt on various counts which renews consumer confidence. As the Budget 2024 approaches, retailers across the spectrum hope for measures that can fuel growth and address challenges. Planned Reduction in individual income tax rates, especially for middle-income earners, could boost disposable incomes and drive spending. Increased spending on infrastructure (roads, highways, rural development) would create jobs and improve connectivity, potentially leading to higher disposable incomes and increased demand for consumer goods. Allowing 100% Foreign Direct Investment (FDI) in multi-brand retail could attract foreign investment which can further boost the retail business, concerns about small traders need careful consideration. Lowering import duties on raw materials and finished goods would enhance competitiveness in the retail sector," says Rajat Agrawal, CEO, Barista Coffee.

“With the Union Budget 2024 anticipated to introduce significant changes in taxation structure. Taxation changes aimed to simulate consumption are likely to also give a boost to volume growth which has been below potential. Continued investments in physical and digital infrastructure would help in bringing greater efficiency and expansion of the consumption opportunities. A push towards unlocking rural –consumption, physical infrastructure and address farmer earnings, would really benefit the consumer sector," said Namit Puri, Managing Director & Senior Partner, BCG.

India should cut import tax on six types of mobile telephone components to reduce the cost of local smartphone assembly and manufacturing units, industry body India Cellular and Electronics Association (ICEA) said in a statement.

The government should consider tax cuts in India's lower income brackets to leave more money in people's hands and support consumption, the Confederation of Indian Industry (CII) lobby group said.

“To boost investment in manufacturing capacities and support the "Make in India" initiative, introducing a new provision in the Income Tax Act could be transformative. This new provision would offer a tax rebate for companies that reinvest a substantial portion of their profits into domestic manufacturing infrastructure and technology.

For example, companies that reinvest at least 30% of their annual profits into manufacturing facilities, machinery, or research and development within India could receive a tax rebate of up to 20% of the reinvested amount. This incentive would encourage the expansion and modernization of manufacturing capacities, drive technological advancements, and foster innovation. Simplifying compliance requirements for these rebates would enhance their attractiveness, thereby promoting a robust and self-reliant manufacturing sector aligned with the "Make in India" vision,” said Dhaval Selwadia, Partner, N.A. Shah Associates.

With the government’s commitment to meet “Net Zero” by 2070, we are hopeful for significant strides in the renewable sector through measures like providing viable gap funding for harnessing offshore wind energy, coal gasification, and liquefaction capacity. In the Interim Budget for 2024-2025, the fiscal allocation for solar power grid infrastructure development surged to Rs. 8,500 Crore, a significant rise from the previous year’s Rs. 4,970 Crore. In addition, India’s installed solar capacity has witnessed a record addition of 15 GW in FY 24, driven by falling costs and constant government support, says Yogesh Mudras, Managing Director, Informa Markets in India.

"As we look forward to Budget 2024, the real estate sector is eagerly anticipating some game-changing reforms to fuel economic growth. We're hoping for tax benefits for homebuyers and investors, like increasing the deduction limit on home loan interest payments and reducing GST on under-construction properties, which would likely spark a surge in housing demand. It's also essential to streamline project approvals to keep the momentum going. We're excited about the potential for policies that not only promote sustainable growth but also tackle industry challenges head-on, opening up more job opportunities across related sectors. Overall, we hope to see policy measures that foster sustainable growth and address key challenges facing the industry in the upcoming budget,'' says Vikas Bhasin, Chairman & Managing Director - Saya Group

"The current 18% GST on retail health insurance imposes a significant burden on consumers, hindering their ability to afford crucial medical coverage, especially amidst rising premiums due to recent global health crises. Reducing GST to 5% or exempting it altogether would not only make health insurance more affordable but also encourage uptake of higher sum insured policies, thereby enhancing financial security for individuals and families," says Rahul Agarwal, founder and CEO of Ideal Insurance

“We at Infobip are optimistic about the government's continued focus on digital transformation and technological advancement in India. The country’s digital revolution has gained significant momentum, with AI advancements paving the way for growth opportunities. As AI becomes increasingly embedded in our daily lives, government backing will be crucial in driving innovation across industries. From AI-powered communication to broader tech applications, both emerging startups and established companies must leverage these technologies to enhance customer experiences.

We expect to see increased allocation for technologies such as AI, IoT, and cloud computing, which are crucial for India's global competitiveness. Additionally, we hope for initiatives that will enhance digital infrastructure, particularly in rural areas, to bridge the digital divide and unlock the potential of the country’s vast talent pool. As a global leader in omnichannel communication, Infobip stands ready to contribute to the digital journey and believes that a tech-focused budget will pave the way for unprecedented growth and innovation in the country's IT landscape.”

“We anticipate a budget that prioritizes the energy security of the nation. India, being the fastest growing economies in the world, has a high energy demand, and there is a need to encourage investments in expanding refining and petrochemical capacities. Offering tax incentives, supporting faster clearances, facilitating land acquisition, etc. will encourage both domestic and foreign investments. Investment schemes for petrochemical industry will enhance the country’s self-sufficiency and promote substantial investment which will generate huge employment and aid creation of surrounding infrastructure facilities.

The Government has set a target of 20% blending of ethanol in petrol/gasoline by 2025 and the early success of the program has well-positioned India on a sustainable growth path. This should be continued To further accelerate India’s transition towards a low-carbon economy the government could consider incentivizing users to replace grey hydrogen with green hydrogen, providing incentives for Corporates to fund R&D by premier or dedicated Indian research institutes for developing transformative technologies, developing centralised or shared Renewable Energy storage systems, amongst other initiatives”.

"I believe the forthcoming budget holds immense potential to catalyze growth and innovation in India's FMCG sector," said Ravi Kabra, Co-Founder of Skippi.

"Our industry faces several challenges that require thoughtful policy interventions to overcome." Kabra emphasizes the need for strategic measures to address industry hurdles, fostering an environment conducive to sustainable growth and innovation in the FMCG sector.

The salaried class will be closely monitoring the upcoming full budget for FY25 in hopes of securing tax breaks amid rising living costs.

According to Deloitte, salaried individuals are looking for a revamp of tax slabs, adjustments to housing rent allowance (HRA) rates, incentives for electric vehicle (EV) sales, and a bigger push for affordable housing in the Budget 2024.

• Higher outgoes on welfare schemes to support the sagging consumption growth will be among the key focus areas in the Union budget to be presented next week, a domestic rating agency said on Tuesday.
• The budget will look at pushing consumption through higher allocation for the rural economy, welfare schemes and agriculture, Care Ratings said.
• Welfare schemes may get a higher allocation in the budget, it said, specifying that there can be a Rs 75,000 crore rise in revenue expenditure compared to the allocation in the interim budget presented earlier this year.

Market participants are closely anticipating announcements concerning Long Term Capital Gains (LTCG) tax as Finance Minister presents the Union Budget for 2024-25 on July 23. This sentiment aligns with findings from a pre-budget survey conducted by Moneycontrol in collaboration with Deloitte, involving 78 CEOs across various sectors.

The survey highlighted that a significant number of CEOs are anxiously awaiting details on a potential uniform capital gains tax regime, which could involve streamlined holding periods. This expectation underscores the importance of tax policy clarity and its impact on investor sentiment and market dynamics. More here.

• The government is likely to lower fiscal deficit to 4.9-5 percent of the GDP for this financial year in the upcoming Budget aided by revenue buoyancy.
• The government had pegged the fiscal deficit estimate at 5.1 percent for the current fiscal year when it presented the interim Budget in February.
• “The union government is likely to set a fiscal deficit target at 4.9-5 percent, lower than projected 5.1 percent of GDP, without compromising the capital expenditure target of Rs 11.1 lakh crore,” ICRA Chief Economist Aditi Nayar.

Discussions surrounding potential changes to India's capital gains tax regime have sparked varied reactions among analysts and investors, reflecting apprehension within the market.

Christopher Wood, Global Head of Equity Strategy at Jefferies, shared his perspective in an exclusive interview with CNBC-TV18, suggesting that initial concerns may be overstated. He highlighted global examples such as Hong Kong, where the absence of capital gains taxes has potentially spurred investment and market growth.

Wood emphasized the importance of structuring India's capital gains tax policy to incentivize long-term investments, proposing significant differentials between short-term and long-term tax rates as a means to encourage stability and investor confidence.

• Rajasthan Finance Minister Diya Kumari on Tuesday said the 'double engine' government will fulfil its budgetary announcements and promises.
• She described the revised budget of 2024-25 presented in the House as a visionary budget for developed Rajasthan.
• She was responding to the debate on the revised budget 2024-25 in the Assembly on Tuesday.
• Leader of Opposition Tikaram Jully termed the government's budget as ''dull and directionless'' and said the House must have never seen such a "disappointing budget".

Samir Arora, founder of Helios Capital: In a recent statement on X (formerly Twitter), Arora urged against tightening the capital gains tax regime, drawing on China's experience to illustrate potential investor dissatisfaction even amidst reformist budgets. Arora emphasized the importance of implementing reforms that prioritize investor interests to maintain market stability.

The Centre is considering a revision in the holding period for immovable assets, specifically real estate, to bring uniformity to capital gains tax treatment, according to a report by The Economic Times. Currently, profits from the sale of real estate held for less than 24 months are classified as short-term capital gains. This contrasts with the shorter 12-month holding period for listed equities and equity mutual funds, where gains are treated as short-term if held for less than a year. More here.

• "Government intervention is vital to integrate sustainable practices and ensure global competitiveness," stated Anup Garg, WOCE's founder and director. MSMEs have resource and financial constraints, thus government assistance for sustainable investments is crucial."
• MSMEs make up around 90% of all enterprises globally and produce more than 60% of the world's CO2 emissions each year, of which 110 million tonnes come from India alone. Scope 3 emissions, or the indirect emissions from supplier chains, are what WOCE seeks to assist MSMEs in reducing. Anup Garg states that a worldwide decrease in Scope 3 emissions of 10% to 15% is feasible with the right advice and solutions.

• FAME-3 Policy: The industry is anticipating the announcement of the FAME-3 (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) policy, which is crucial for providing incentives and support to boost EV adoption.
• Funding for Charging Infrastructure: There is a need for substantial fund allocation for expanding EV charging infrastructure across the country, which is essential for enhancing consumer confidence and adoption.
• Incentives for Localizing Battery Components: Encouraging local manufacturing and assembly of battery components through incentives could reduce dependency on imports and support the development of a robust EV ecosystem.

Finance Minister Nirmala Sitharaman's interim budget for 2024, presented in February, did not address international credit card transactions under the Tax Collected at Source (TCS) framework.

However, the upcoming Union Budget is expected to include these transactions, aligning them with other payment methods under the LRS. Notably, education and health expenditures abroad will continue to receive favorable TCS treatment, taxed at a fixed rate of 5 percent for amounts exceeding Rs 7 lakh.

• Dr Harshit Jain, Founder & Global CEO of AI-powered healthcare marketing platform Doceree, expects Budget 2024-2025 to offer robust support for R&D in the pharma sector.
• He said, “Budget 2024 is a defining moment for the pharmaceutical sector in India. We look forward to robust support toward R&D and innovation through higher fiscal incentives and reduced GST on critical inputs to spur growth, foster technological advancement, and further fortify India's leadership in global healthcare.”

• The government is likely to lower fiscal deficit to 4.9-5 percent of the GDP for this financial year in the upcoming Budget aided by revenue buoyancy.
• The government had pegged the fiscal deficit estimate at 5.1 percent for the current fiscal year when it presented the interim Budget in February.
• “The union government is likely to set a fiscal deficit target at 4.9-5 percent, lower than projected 5.1 percent of GDP, without compromising the capital expenditure target of Rs 11.1 lakh crore,” ICRA Chief Economist Aditi Nayar.

• The Asian Development Bank (ADB) has maintained its growth forecast for India's fiscal year 2025 at 7%, which is consistent with its previous outlook released in April. Looking ahead to fiscal year 2026, the ADB anticipates India's economy to grow faster at a rate of 7.2%.
• This announcement from the ADB closely follows the International Monetary Fund's (IMF) revision of India's growth forecast. The IMF upgraded its projection for India's economy, expecting it to grow at 7% for the fiscal year, up from the 6.8% forecasted in April.
• These projections indicate a positive outlook for India's economic growth, reflecting confidence in its recovery and potential expansion in the coming fiscal years.

• Fertiliser stocks are buzzing in the run up to the Union Budget, as the market speculates on quantum of subsidies for the sector and measures to reduce dependence on imports.
• With raw material prices having fallen, investors are not expecting any increase in fertiliser subsidies. The widely held view is that the Finance Minister will stick to the estimate outlined in the interim Budget. The interim Budget had estimated the fertiliser subsidy requirement for FY25 at Rs 1.64 lakh crore, which is lower than Rs 1.89 lakh crore for FY24. More here.

• Apparel exporters have sought fiscal incentives including cut in customs duties and fund support in the forthcoming Budget to boost the outbound shipments from the sector.
• The Apparel Export Promotion Council (AEPC) suggested the government should increase the rates under the interest equalization scheme to 5 percent for all the apparel exporters for a period of five years.

• Import holidays, GST exemption for components of launch vehicles, productivity-linked incentives (PLI) and government stepping in as a customer are some of the expectations of the private space sector from Finance Minister Nirmala Sitharaman as she presents the Union Budget next week.
• "More money for space related acquisitions, tax holidays, import holidays, and PLI scheme for space," Pixxel Space co-founder and CEO Awais Ahmed told PTI.
• Industry bodies Indian Space Association (ISpA) and Satcom Industry Association (SIA-India) have sought greater government expenditure on the space sector in the form of an anchor customer for the nascent private sector.

• Former World Bank chief economist Kaushik Basu has called on the Modi government to focus on the welfare of ordinary citizens and allocate more funds to the manufacturing sector in the upcoming Budget to boost small businesses and job creation. In an interview with PTI, Basu stressed the importance of shifting attention to ground-level economic welfare.
• Basu said he hopes that the Union Budget for 2024-25, which Union Finance Minister Nirmala Sitharaman is set to present in the Lok Sabha on July 23, will prioritise the welfare of ordinary citizens rather than solely aim to increase aggregate GDP.
• "I believe that the rich can afford to pay higher taxes, and using this money to incentivise the manufacturing sector can go a long way in boosting demand for labor, helping small businesses, and raising the income of ordinary people," he said.

The upcoming Union Budget for this fiscal year is set against a backdrop of strong growth momentum, bolstered by healthy external buffers and robust balance sheets of corporates and banks. However, there are challenges that need to be addressed. Stubborn food inflation remains a concern, alongside weak consumption demand and tepid private investments. These factors highlight the need for remedial measures in the budget.

It's important to note that a quarter of the fiscal year has already passed, meaning that budgetary measures will primarily impact the performance of the second half of the current fiscal year. Therefore, the budget needs to be strategic and targeted to effectively address the existing challenges while leveraging the strengths of the economy to sustain and accelerate growth. Read the entire report here.

• In its budget expectations, the aviation industry has asked for tax deductions and rationalisation to help make the sector more lucrative while also requesting a priority sector loan designation for airports in order to lessen the impact of high fuel costs.
• 4.2 lakh Indians flew domestically on a daily basis in the fiscal year 2023–24, making India the third-largest aviation market in the world, behind the US and China. The figure was 1.85 lakh in 2014. Although the industry is still growing at a rapid pace, profitability is still in doubt.
• Major players like Delhi International Airport Ltd. and Mumbai International Airport are members of the Association of Private Airport Operators, which has asked the government to classify airports under priority sector lending and resolve any confusion regarding the collection of the user development fee, which is paid by passengers.

• Higher outgoes on welfare schemes to support the sagging consumption growth will be among the key focus areas in the Union Budget to be presented next week, a domestic rating agency said on July 16.
• The Budget will look at pushing consumption through higher allocation for the rural economy, welfare schemes and agriculture, Care Ratings said.
• Welfare schemes may get a higher allocation in the budget, it said, specifying that there can be a Rs 75,000 crore rise in revenue expenditure compared to the allocation in the interim Budget presented earlier this year.
• The government is expected to undertake higher allocations on employment guarantee programmes, PM Awas Yojana, PM Gram Sadak Yojana, PM Kisan Samman Nidhi and schemes related to labour-intensive small businesses, the agency said.

• The government is likely to introduce amendments to Banking Regulation Act 1949 and other laws to push banking sector reforms during the upcoming Budget session.
• Apart from this, amendments in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 are needed for privatisation of public sector banks, sources said.
• These Acts led to the nationalisation of banks in two phases and provisions of these laws have to be changed for the privatisation of banks, they said. (PTI)

• Nomura predicts the government to lower its FY25 fiscal deficit target to 5 percent of the GDP, down from the 5.1 percent announced in the interim Budget.
• "Despite the increased financial demands of the two key allies (estimated to be around 0.2 percent of GDP in FY25), we expect the government to use the space afforded by higher RBI dividend (~0.4 percent of GDP) and lower FY24 fiscal deficit (~0.2 percent of GDP)," Nomura stated.

According to a recent Reuters poll, the Indian government plans to adhere to its pre-election borrowing and spending targets in the upcoming July 23 budget, despite the Bharatiya Janata Party (BJP) losing its majority in this year's national elections.

Although the BJP has had to collaborate with regional parties to secure government formation, it has retained many ministers from its previous term. This continuity suggests that fiscal policy will likely focus on bolstering economic growth through increased infrastructure spending. Read more here.

• The US-India Strategic Partnership Forum has urged Union Finance Minister Nirmala Sitharaman to ensure a stable and predictable tax environment as she prepares for her annual budget later this month.
• The US-India Tax Forum, a dedicated Tax Policy Forum of the US-India Strategic Partnership Forum (USISPF), said this in a set of recommendations to Sitharaman.
• In a press release by USISPF, the tax forum said that a stable and predictable tax environment is imperative to boost investment sentiment across sectors.
• "The industry eagerly anticipates the Union Budget 2024-25, the first budget of the re-elected Government, which is expected to introduce measures that will stimulate growth across sectors," it said.

• Assocham has suggested structural reforms in the agriculture sector to enhance productivity, market access, and income opportunities for farmers.
• It also suggested promoting contract farming, investing in agri-infrastructure, facilitating value chain integration, and encouraging diversification into high-value crops.

• Following a recent meeting between Andhra Pradesh Chief Minister N Chandrababu Naidu and Prime Minister Narendra Modi, the central government has reportedly agreed to a significant demand for establishing an oil refinery and petrochemical hub in the state. The project, anticipated to attract investments totaling Rs 60,000 crore, has been a focal point of discussions aimed at bolstering economic development in Andhra Pradesh.
• According to a report by The Economic Times, discussions between Naidu and top officials from Bharat Petroleum Corporation Limited (BPCL) explored the feasibility of setting up the refinery at three potential locations: Srikakulam, Machilipatnam, and Ramayapatnam. Each site represents a distinct geographical segment of the state, adding political sensitivity to the decision-making process.

• The upcoming Union budget is likely to keep the fertiliser subsidy at approximately Rs 1.64 lakh crore as estimated in the interim financial statement of the government, which is a significant reduction of over 13 percent from the previous year’s expenditure of Rs 1.89 lakh crore, a government official said.
• “The fertiliser subsidy allocation is likely to remain more or less the same in the Union budget as urea imports will be significantly lower this year with a boost in nano urea, and the global input prices are expected to be stable,” the official told Moneycontrol on condition of anonymity.

Finance Minister Nirmala Sitharaman is preparing to unveil her seventh complete budget on July 23. Known for her focus on fiscal discipline, substantial capital investment, and initiatives to promote self-reliance and bolster manufacturing, Sitharaman's past budgets have reflected these priorities.

The interim budget she presented in February defied expectations of populist measures typically seen in pre-election budgets, opting instead for a more restrained approach.