By the time you’re reading this piece, there is a possibility that we’d be in the middle of the interim budget announcement for the fiscal year 2024-25, by Finance Minister Nirmala Sitharaman, scheduled on February 1, 2024.
While many of us expect some indispensable leaps in several areas including technology, innovation, manufacturing, and R&D, FM Sitharaman while speaking at an event by the Confederation of Indian Industry (CII) ruled out the possibility of any “spectacular” announcements. This cements the fact that fiscal discipline will take precedence over populist spending, thus following the premise of a conventional interim budget model.
It will be interesting to see the stance that this budget will adopt, especially in expediting growth in the Power and Energy sector with lead incentivization for green hydrogen. The oil and gas sector has expectations of steady reforms for City Gas Distribution players that will boost natural gas consumption in the country, while the power sector is keen on noticing some bold initiatives to encourage the adoption of renewable energy. As per EY’s 2024 Budget expectations report, the government may extend the concessional 15 per cent income tax rate for corporations, to set up manufacturing units by one year till March 31, 2025, to attract foreign investments. Experts also predict that the government could unveil an expanded third phase of the incentive scheme for electric vehicles and that the budget will cater to further strengthening of the startup ecosystem in the country.
Overall, India is expected to maintain the growth momentum into FY25, and the upcoming union budget can be a solid step toward realizing the country’s ambition of becoming the third-largest economy.
Let us take a look at what some of the prominent industry experts’ expectations are from this year’s interim budget, as shared with ELE Times.
Saurabh Marda, Managing Director and Co-Founder at Freyr Energy –
“The rooftop solar sector in India is rapidly expanding, with an impressive CAGR of 15%. To further accelerate the adoption of solar, the Ministry of New and Renewable Energy (MNRE) has decided to increase the Central Financial Assistance (CFA) by 23%. One major challenge that many customers face, however, is the high upfront investment. To promote the wider adoption of solar energy, we hope that the 2024 union budget will encourage banks to offer affordable financing options for solar solutions. By providing low-interest loans, these financial institutions can significantly contribute to India’s progress towards sustainable energy”.
Prem Kumar Vislawath, CEO and Founder at Marut Drones –
“The Central government has been on the right path in paving the way for large-scale embrace of drones in India with its decision to provide 15,000 agricultural drones free of cost to rural women under the Drone Didi initiative. The aviation sector is bound to see incredible changes in the coming years. In budget 2024, we are hoping to see ease of regulations for start-ups as well as consumers, along with easy financing for drones for commercial purposes. A 100 per cent subsidy to farmers on drone training certification programs through Skill India would support the drone ecosystem of the country. GST waiver on drones, allied products, software, training, and licenses could be an excellent step towards that future. We are hoping to see ease of regulations for start-ups as well as consumers. For instance, a PLI scheme extension for components and manufacturers would be a great incentive for start-ups. Easy financing for drones for commercial purposes can go a long way in making them affordable to all sections of society. Fine-tuning policies and quicker clearances will help the drone industry achieve its true potential of making India a drone hub by 2030”.
Mr Kumar Gaurav, Co-Founder of Cashaa-
“As we eagerly anticipate the Union Budget of 2024, Cashaa is hopeful for transformative measures that will shape the future of the Indian crypto sector. Our primary expectation is a reduction in the flat tax rate from 30%, aligning crypto gains with other asset classes like debt and equity. We also advocate for a significant drop in the high TDS rate from 1% to approximately 0.01%, aiming to rekindle trading volumes crucial for a vibrant market. A decisive and supportive regulatory framework is pivotal, as it will not only encourage innovation but also attract vital investments to fuel the growth of the crypto sector in India. While our optimism runs high, we remain mindful of the interim nature of this budget, preceding the 2024 general elections”.
Pankaj Jha, Country Head & Director of Sales, MAXHUB India-
“As the country continues to evolve, it is imperative for the government to channel its efforts towards the digitalization of education, aligning with the visionary National Education Policy 2020. In addition, expanding the scope of smart city projects to include more cities will undoubtedly contribute to our nation’s growth. I strongly advocate for the simplification of custom duties and incentives for ‘Make in India’ initiatives, with a special focus on facilitating contract manufacturing. Furthermore, providing tax exemptions on smart classrooms for private education players is an essential step in fostering innovation and accessibility. These measures collectively pave the way for a technologically advanced and educationally empowered India”.
Mr. Manideep Katepalli, Co-Founder at BikeWo –
“Despite last year’s commendable 33% surge in EV registrations, our industry encounters persistent challenges. Chief among these hurdles is the imperative need for robust charging infrastructure, pivotal in inspiring confidence among potential buyers and propelling the widespread adoption of electric vehicles (EVs) as a sustainable mode of transportation.
Another barrier remains the relatively higher initial cost of EVs, often deterring consumers. However, the promise of life tax subsidies for electric vehicles and the availability of accessible EV financing options hold immense potential to mitigate this challenge.
The integration of EV infrastructure into Priority Sector Lending (PSL) is poised to bolster credit flow into the sector by mandating financial institutions to provide support, thus promising a significant boon.
A supportive regulatory framework coupled with financial incentives aimed at fostering research and development within the EV sector stands as an indispensable pillar. These measures not only drive innovation but also attract investments, creating an environment conducive to widespread EV adoption.
Ultimately, these strategic initiatives play a pivotal role in establishing an enduringly sustainable and eco-friendly transportation ecosystem”.
Dinesh Arjun, CEO & Co-Founder at Raptee-
“As the electric vehicle (EV) industry gears up for substantial growth in the coming years, it is imperative for the government to foster a supportive ecosystem. To stimulate investment opportunities, there should be encouragement for potential investors, coupled with essential reductions in GST rates for electric vehicles and charging stations. Additionally, easing the burden on the industry can be achieved through a decrease in import duties on electronic components. Given their pivotal role in the EV sector, the industry is particularly hopeful for a significant GST reduction, aiming to bring it down from 18% to 5% specifically for lithium-ion battery packs and cells. A concerted effort in the budget towards enhancing the ease of doing business and facilitating the entry of local players into the market is crucial. Addressing aspects like component localization and ensuring easy access to necessary components will empower Indian companies, both large and small, to develop competitive products at competitive prices, further solidifying the sector’s growth potential”.
Ritesh Kumar, Founder at Cyfirma-
“We would like to see the upcoming budget carry a strong focus on helping businesses overcome the threats of cyberattacks and other digital risks. Indian businesses are adopting digital solutions at an accelerated pace yet their cybersecurity maturity remains low. A budget that supports SMEs and start-up’s growth while ensuring their cybersecurity needs are taken care of is much needed in the current AI and digital age. The government’s approach needs to move beyond building compliance frameworks to providing tangible subsidies for cybersecurity protection solutions”.
