India Budget 2024: Balancing Growth and Sustainability Amid Diverse Sectoral Expectations

Analysis: India Budget 2024 Expectations

1. Infrastructure and Sustainability:

• The Indian government is expected to focus on sustainable infrastructure development. Emphasis might be on promoting green buildings and pre-engineered buildings (PEBs) by providing incentives and reducing GST for such projects. This aligns with India’s goal of becoming a $5 trillion economy by 2025, where an effective regulatory framework for sustainable construction becomes crucial.

2. Food and Fertilizer Sector:

• A slight decrease in international fertilizer prices might lead to a stable budget allocation in this sector. The previous year’s allocation was around INR 1.75 trillion, and expectations suggest it might remain in the same ballpark.

3. Chemicals Sector:

• The sector faced challenges in 2023, and there’s an anticipation of measures against chemical dumping from neighboring countries. The industry is advocating for significant import duties on such products to protect domestic manufacturers.

4. MedTech Sector:

• There is a growing expectation for a reduction in high tariff and customs duty rates on medical devices. Since a significant portion of critical medical devices are imported, the industry seeks relief in customs duties to facilitate access to quality healthcare and manage inflationary pressures.

5. General Industry Expectations:

• Industry experts anticipate a focus on power, utilities, renewables, railways, infrastructure, and capital goods sectors. FMCG and automotive sectors might benefit from increased rural spending. The e-commerce sector also expects policies that would enhance its global competitiveness.

6. Governance and MSMEs:

• The government is likely to continue its trend of ‘minimum government and maximum governance,’ focusing on privatizing non-functional PSUs, automation, and centralized functions. For MSMEs, expectations include support for low-cost capital, enhanced local sourcing requirements, and reduced paperwork.

7. GST and Income Tax:

• There is a call for stability in GST processes and re-organization of GST slab rates. Income tax reforms might focus on expanding the tax base, simplifying compliance, and possibly implementing the new tax regime fully.

8. Banking and Higher Education:

• Banking sector reforms could include asset value re-enforcement and privatization. In higher education, an increase in institution-industry quotient (IIQ) for innovation and synergy is expected.

Sources:

• India Briefing: Understanding India’s Interim Budget and Industry Expectations​​.
• Deloitte India: Budget Expectations 2024​​.
• EZTax: Indian Budget 2024 Pre-Budget Expectations​​.