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The interim budget for the fiscal year 2024-25 will be presented in parliament by Finance Minister Nirmala Sitharaman on February 1, this would be her sixth consecutive budget. Due to the approaching general elections, which are scheduled for April or May, the budget will be "interim."
On January 31, parliament will begin its budget session, and the following day, the budget will be presented at 11 am. The Narendra Modi government is optimistic that it will meet the FY24 target of 5.9 per cent of GDP and aims to bring its fiscal deficit down to 4.5 per cent by FY26.
According to a CareEdge study, the government is expected to maintain its capex target of Rs 10 trillion in FY24 and boost it by a further 10% to Rs 11 trillion in FY25. Prior to union elections, the government is likely to not make any significant policy announcements in the interim budget.
Therefore, the government's aim for the fiscal deficit would be the primary topic of interest from the standpoint of the market as a whole. In order to reach the fiscal deficit targets by FY26, the government is additionally anticipated to uphold a certain level of fiscal restraint. The middle class would also anticipate some tax relief because recent revenue collection has surpassed expectations.
Budget 2024
We are introducing a scheme to support free food grains.
Budget 2024
People-centric agendas will drive growth.
Budget 2024
G20 gives us opportunities to strengthen India's role on global stage.
Budget 2024
We are implementing scheme to support free food grains.
Budget 2024
Indian economy is on the right track.
Quote On Pre-Budget By Pramod Kathuria, Founder & CEO, Easiloan
“With Budget 2024 approaching, Indians are looking forward to changes that will have a significant impact on the home loan industry. A key focus is on increasing the tax deduction limit for home loan interest, which is currently set at Rs. 2 lakhs. Experts are advocating for a rise to Rs. 5 lakhs, believing it will breathe new life into the struggling affordable housing sector, which has suffered since the Covid pandemic. There is a shared desire for stability or even a drop in interest rates to keep the dream of homeownership alive. However, much of this depends on the Reserve Bank of India's (RBI) decisions and monetary policy. Beyond financial considerations, there is a call for a technological upgrade to the home loan application process. Many believe that incorporating technology is essential for the sustainable growth of the industry. A more streamlined, user-friendly application process could significantly improve the home-buying experience.”
Pre-Budget Quote: Kunal Varma, CEO and Co-founder of Freo
“Will more deductions for home loans, boost affordable housing? - Increasing the tax deduction limit will make home loans more attractive, reducing the net cost of borrowing for home buyers. This can lead to a rise in demand for affordable homes, which in turn can spur the construction and real estate sectors, creating a positive economic ripple effect. A higher rebate will put more disposable income in the hands of the people who are the primary target customers for budget housing. This not only provides a boost to the housing and real-estate sector but also ancillary sectors, while pausing a significant sentiment boost. Home loan rates have increased due to factors such as central bank interest rate hikes. An average home loan customer is now paying higher interest than a few years ago, in addition to homes becoming more expensive, due to increases in commodity prices (steel, cement, etc.). This would be a welcome move that would end up as additional savings in consumers’ pockets.” What do you expect in the Fintech, Crypto, and digital payment sectors? “We know that fintechs and regulators are increasingly working together to make things more stable and standardized for legitimate companies, in turn, driving higher trust in the ecosystem. It's also clear that collaboration and partnerships, and not competition, are the way to drive financial inclusion. As we adopt smarter and safer digital solutions, combined with responsible business models, getting credit will be easier and safer from fraud. Self-regulatory organizations (SROs) will address specific issues in the sector and help it reach its full potential. The online credit industry is pushing for stronger ties with digital banking units (DBUs) and expanding UPI for digital lending. Introducing credit on UPI will lead to innovative sachet credit offerings and make small-ticket lending more efficient and affordable. It has the potential to completely transform how affordable credit reaches the last mile and across customer segments. At the same time, this opportunity will also test industry players on their ability to evolve and adapt. We also believe that this year's budget is a chance for the government to increase crypto taxation revenue by encouraging trading on Indian exchanges. This is a good time for the government to enhance this safe ecosystem. A regulatory regime that protects consumer interests in this sector will build trust and stability. Across the board, a stronger focus on protecting consumers from increasing cyber security threats will be a big agenda point for digital payment networks.”
Pre-Budget Expectations By Mr. Nagaraju Routhu, CEO, Experion Developers
"We are optimistic to see a potential positive change in the budget, especially in the affordable housing sector, in this election year. The government stands with an opportunity to revisit and update the limit, which is set as 45 lakhs currently, for affordable housing. With the hike in property prices over recent years, a thoughtful adjustment of this limit, perhaps to 60-65 lakhs, would create avenues for the expansion and availability of affordable homes. With this adjustment, there could be a significant contribution to making housing more accessible and catering to the needs of a broader segment of the population. While we may not anticipate major budgetary changes in other areas, there is a hopeful prospect for positive developments in the realm of affordable housing."
Nikunj Agarwal, Head Debt & Lending Alliances · Propelld
“In light of the 2024 election, expectations are subdued regarding major shake-ups in the upcoming Interim Budget-24. However, there's a strong call for measures to support liquidity ease for new-age financial players, particularly the NBFCs, serving as a lifeline for those struggling to access financial services. Additionally, the global spotlight on ESG practices—focusing on environmental, social, and governance aspects—raises hopes for added incentives for financial institutions championing these causes. NBFCs eagerly await financial support and acknowledgment of their positive contributions. If implemented, could potentially fortify the further sustained and inclusive growth.”
Vineet Agrawal, Co-Founder, Jiraaf Budget Expectations
“As the alternative space expands, fixed continues to gain more prominence as well. While equity markets saw considerable growth over the last two decades, growth of debt market is critical for the country. Availability of debt across all segments of borrowers especially MSME & new age companies would fuel growth and employment. We are thankful to SEBI for taking measures in recent times to democratize the fixed-income space with initiatives like OBPP, making listing simpler and reducing face value for participation in debentures. We hope in the upcoming budget, the government would continue to bring down the difference in capital gains taxation between equity & debt to unlock more participation in credit instruments."
Pre Budget Expectations For Financial Sector On Behalf of Mr. Devrath Banerjee, Director, TresVista
Since this is an election year, the budget is expected to provide continuity to the government's previous initiatives without initiating any drastic reforms/additions. With the forthcoming budget, the financial sector is seeking a more comprehensive policy on cryptocurrency regulation, and the government is expected to create a regulatory framework that increases the ICRA's participation in the crypto market. The industry expects the government to rationalize the tax rates levied on Indian and foreign banks. RBI, SEBI, and IRDAI Regulators have started working together to ensure that financial innovation does not come at the cost of financial stability. The 2024 Union Budget is expected to make accommodations toward regulating the crypto and fintech sectors by setting up a separate inter-regulatory cooperation framework. The government has also been nudging banks to settle their foreign transactions via Indian rupees since July last year. Launching international trade in the Indian currency could lead to savings of -36 billion annually, reducing the pressure on the exchange rate. A push toward the same in this year's budget can be anticipated with increased incentives for banks. The dividends tax is another area where markets will be hoping for a change. Currently, a firm pays taxes on its profits, but at the same time, the shareholders are also taxed on their dividends, resulting in double taxation. Changes to rectify this anomaly can be awaited, with reforms to make dividends tax-free for shareholders.
Pre-Budget Expectations On Behalf of Mr. Pranav Haridasan, MD and CEO, Axis Securities
We believe that the interim Budget will retain the growth roadmap and reaffirm the government's commitment to long-term growth, with a continued focus on infrastructure development. The impact of the Union Budget on the equity market has reduced notably over the past few years, with the government undertaking most of the reforms outside the purview of the Budget. Nonetheless, the market participants continue to view it as a critical catalyst stimulating the growth of the Indian economy and, thereby, the Indian market. With the Budget being an interim one and a vote on account, we do not see significant announcements in this Budget. However, we expect key policy reforms, such as Atmanirbhar Bharat, Make in India, and the PLI scheme, to continue and receive further impetus in FY 25. There may be an increased emphasis on power, utilities, and renewables. Railways, infrastructure, and capital goods companies are poised to remain in the spotlight with higher capex spending. Automobiles and FMCG are likely to get a boost from higher rural spending.
Dr Prashant Bhalla, President, Manav Rachna Educational Institutions ( MREI )
"The country’s knowledge ecosystem, the Education Sector, anticipates Budget 2024 as the Budget of transformation and growth. Budget 2023 allocated 1.12 lakh crores to the education sector. Considering the increased tax buoyancy, the government has headroom, and the education budget is expected to cross 1.5 lakh crores this fiscal year. With the ed-tech industry expected to reach USD 4 billion by 2025, the government is expected to prioritize digital education initiatives aligned with NEP 2020; the education sector looks forward to budget for incentives for increasing the affordability and quality of digital learning. On the skilling side, much work has been done. 30 Skill India International Centers were announced across the states last fiscal year. So far three such Centers have been set up. Budget 2024 needs to allocate funds for the establishment of the 27 centers. Vocational training institutions focused on deep tech, AI, and analytical skills to meet the global demand for technical roles can reshape the learning landscape in India. Investing in technology-related vocational training is expected to promote innovation, economic growth, and global competitiveness. Increased budgetary allocations for research and development and the establishment of Multi-Disciplinary Education and Research Universities are expected in the Budget to fortify the foundations of the Education Sector.”
Ahsan Karim Khan, Director, Splice Ply
“The Indian plywood industry is advocating for budgetary relief in the year 2024, with a specific emphasis on the facilitation of timber imports, the promotion of sustainable forestry practices, and the exploration of alternative materials through research initiatives. Essential to the industry's advancement are technological upgrades, supported by financial assistance and the establishment of dedicated research and development centers, coupled with incentives for automation. The industry underscores the significance of export promotion, achievable through duty reductions and strategic market development of defined goods. Simultaneously, the domestic market's growth is contingent upon heightened infrastructure spending, reduced Goods and Services Tax (GST) rates for plywood products, and measures supporting affordable housing initiatives. Prioritizing skill development, environmental sustainability, and the creation of a conducive business environment are further imperatives for ensuring the sustained growth of the industry.”
S Ravi, Founder, Ravi Rajan & Co.
“The 2024 budget for India, amidst global recession and a 6.4% fiscal deficit, demands a nuanced approach from the Finance Minister. Balancing economic growth, tax concerns, and citizen relief is crucial. While hopes for a new 25% high-income tax slab are slim, expectations include increased basic exemption, standard deduction, and higher limits for 80C & 80D. Additional relief in children's education, hostel allowances, and boosted home loan deductions could alleviate burdens. Though fulfilling every wish may be challenging, strategic concessions might be the key to navigating these challenging times. The budget also prioritizes sustaining economic growth through increased infrastructure spending, alongside social welfare boosts for farmers, rural workers, and the elderly. Education and healthcare are likely to receive more funding, complemented by initiatives for clean energy, pollution reduction, and sustainable agriculture. Anticipated tax changes, industry-specific incentives, and support for sectors like gems & jewelry, MedTech, and IT underline the budget's goal of balancing fiscal prudence with populist measures, paving the way for a greener, more inclusive future.”
Amit Baveja, MD, Burlington English (India)
“As we look to the fiscal year 2024-25 Union Budget, our expectations are grounded in a broader assessment of the current state of education in the country, reflecting both persistent challenges and opportunities for improvement. The recent Annual Status of Education Report 2023 serves as just one illustration of the pressing need for attention and reform in various aspects of our education system. The report reveals that among students aged 14-18 from rural backgrounds, around 25% could not read a Class 2-level textbook in their regional language. Similarly, almost 58% of these students could not read and comprehend sentences in English. Recognizing the urgency to uplift the quality of grassroots education, we advocate for a higher budget allocation to expedite initiatives in these underserved areas. The recent implementation of the NEP, specifically the continued emphasis on skilling and nurturing the development of our youth towards employability has been commendable. This focus is critical to creating a workforce that is not only well-educated but also job-ready. We expect deeper penetration of the NEP in tier 2 and tier 3 cities through various training-led initiatives and look forward to provisions in the upcoming Union Budget 2024-25. We hope for a budget outlay for building the linguistic capabilities of our students and young adults, particularly in English. Additionally, we emphasize the significance of teacher development, a critical component of successful teaching and learning processes. The vital emphasis on teacher training outlined in the NEP 2020 should involve innovative pedagogy, upskilling, and curriculum development. Furthermore, we anticipate government incentives for hybrid education which combines traditional teaching methods with technology, especially in tier 2 and tier 3 cities. This could be achieved by establishing digital learning labs in collaboration with private players to enhance learner outreach. We are confident that the Union Budget will contribute significantly to India's global competitiveness by fostering outcome-based education."
Saurabh Arora, CEO, University Living
"In anticipation of the upcoming budget, we at University Living want to draw the government’s attention to essential measures that can profoundly impact Indian students pursuing education abroad. We feel an increase in the fund allocation especially to the higher education sector will be welcomed by the expanding student community in India. Foremost, we believe lower interest rates on education loans will be a crucial step in alleviating financial burdens for students and their families, enhancing access to education in a destination of one’s choice. Further, there is a critical need for an increase in grants and scholarships for Indian students, providing essential financial support to deserving students. Scholarships play a transformative role, offering support and opportunities for talented students facing financial constraints, to successfully pursue their academic journey. Additionally, a reduction or waiver in Tax Collected at Source (TCS) while remitting money for overseas education and ancillary activities will be a welcome sign. Lowering or waiving off TCS while remitting funds overseas for education will ease the burden on families and encourage more students to explore educational opportunities at a destination of their choice. Lastly, exploring student concessions on air travel is imperative to make global education economically viable for a broader demographic of students, fostering cultural exchange and elevating India's representation on the global academic stage. In summary, we hope these comprehensive budgetary considerations aim to create a more supportive environment for Indian students undertaking international education, fostering academic growth, and contributing to India's global educational standing."
Manisha Zaveri, Joint Managing Director, Career Mosaic.
“We are anticipating the upcoming budget's potential to unlock new opportunities for international student mobility, we are optimistic about the potential of initiatives fostering collaboration between Indian and international universities, creating avenues for cross-cultural learning and research opportunities. A budget that prioritizes global education will not only empower the vibrant minds of young Indians but also solidify India's standing in STEM fields. With the Indian study abroad sector poised for a post-pandemic resurgence, the upcoming budget holds immense significance. We expect the government to recognize and harness this potential by implementing measures to make international education more accessible and affordable. This could involve targeted scholarship schemes for Tier 2 and Tier 3 city students, tax benefits for families supporting overseas education, and streamlined visa processes. A supportive budget addressing these aspects will not only enable students to pursue their international education dreams but also contribute significantly to India's long-term economic and intellectual growth.”
Sachin Jain, Country Manager, ETS India and South Asia.
“As we look ahead to the upcoming budget for 2024, ETS urges policymakers to allocate resources that accelerate global mobility of India’s young talent. This includes inclusion of language skills and internationally recognized work skill certifications in Indian classrooms. Skills development enterprises, both public and private, must leverage globally benchmarked and recognised skills framework and certifications as these are valued by employers internationally.” Policy makers should also look at comprehensive merit scholarship program for deserving Indian students for postgraduate and research studies in foreign universities with an aim to drive research and innovation in India post completion of their studies. We also urge policymakers to advance public private partnership models that accentuate the “Study In India” initiative, which aims to reinforce India’s position as a Vishwa-Guru to the world.”
Samudragupta Talukdar, Founder & CEO, Relata
“Over the past few years, housing schemes such as PM Awas Yojana have ensured that more and more citizens get a roof over their head. We expect the upcoming budget to expand such affordable housing schemes to further strategic locations and regions, on the lines of how CIDCO is planning over 67,000 homes under both PMAY as well as non-PMAY schemes. The other key expectation from the Union Budget is a focus on enhancing the infrastructure to connect newer regions and areas to open up newer markets and bring pace. Initiatives such as Atal Setu, which has drastically reduced the commute time between Mumbai and Navi Mumbai to expand the real estate market in the region, need to be implemented across India. In the wake of some industry giants pointing that nearly 45% of today’s prices for homes is going towards taxes and levies, there is an urgent need for tax incentives in real estate, especially with regard to GST on raw materials, land acquisitions and inventory sales. The budget ahead must also look at expanding the frameworks and implementations of Next Generation concepts like Real Estate Investment Trusts (REITs) and fractional ownerships. Furthermore, there is a need to improve and strengthen financing options available to home buyers through incentives and policy measures. Traditional bank home loan financing schemes and RBI’s NBFC-powered home financing alternatives shall also contribute in further incentivizing the sector.”
Mr. Rahul Kapoor, Founder & MD, RKA Corporate Advisory (RKCA)
“The taxation slabs should be rationalized to just three slabs. Currently, there are five slabs starting from 5% going up to 30%. This is very complicated and unnecessary. There should be only three slabs. Further, the tax rate of 30% should start at a much higher threshold as it’s unfair to take away nearly ⅓ (income tax plus surcharge and cess) of a person’s income when the person’s income is barely enough to support the high cost of living like housing, travel, children’s education, basic sustenance etc. They should consider making the highest tax slab of 30% plus surcharge and cess applicable beyond 25 lakhs of income. The minimum income tax threshold should be raised so that people who are barely making ends meet in cities don’t have to pay income tax. Also, the old tax regime should be removed and in the new regime, the government should introduce deductions like 80C, HRA, etc. to rationalize the taxation on people paying house rents and making such tax-saving investments as opposed to those who are not. Separately, the GST rates applicable to many essential services like insurance should be reduced and GST on life insurance should be done away with completely. GST has been around for nearly 7 years now and it’s high time the government brings petrol, diesel, and liquor under the GST regime.”
Mr. Ashish Singhal, Co-founder, and Group CEO, PeepalCo
“India introduced its tax provisions for Virtual Digital Assets (VDA) two years ago, during the 2022 Budget. While the industry welcomed the definition and inclusion of VDAs in the Income Tax Act, certain provisions, such as the high TDS rate and the lack of offset have led many Indian VDA users to move to non-compliant foreign exchanges to trade, putting themselves at risk of losing their investment and breaking the law. It also led to lesser tax revenues for the exchequer. As an FIU-registered platform compliant with India’s KYC and PMLA rules, CoinSwitch urges the Government of India to consider the following. i) Reducing the Tax Deducted at Source (TDS) on VDAs, from 1% to 0.01% ii) Allow offsetting and carrying forward losses from sale of VDAs iii) and treating income from VDAs on par with other capital assets The Government of India has shown commendable leadership at the G20 to arrive at a roadmap for a global crypto framework. It has implemented domestic regulatory frameworks such as anti-money laundering that are in line with global standards. This could be the basis for India to reconsider its tax treatment of VDAs, which is an outlier, both domestically and internationally. Reducing the tax arbitrage that exists today will also help stem the flight of capital, consumers, investments, and talent, as well as dent the gray economy for VDAs.”
Mr. Nirav Choksi, CEO & Co-founder at CredAble
“Last year, the Union Budget tabled by the Honourable Finance Minister, Nirmala Sitharaman was a progressive one, listing the seven top priorities that would guide the government through the Amrit Kaal. Ranking as the third largest FinTech hub, India is at the forefront of global growth. FinTechs in India have demonstrated remarkable resilience over the years, backed by timely regulatory support and strong business fundamentals. India's distinctive digital public infrastructure has been an undeniable driving force behind the upward trajectory of the FinTech sector. The upcoming Union Budget in 2024 presents an opportune moment to chart the course for the sustainable growth of FinTechs in the Indian economy. Introducing incentives for FinTechs committed to empowering underprivileged SMEs through financial and technical support would be a much-welcomed move. Additional measures, such as maintaining the profitability of state-owned banks, enhancing credit guarantee schemes for MSMEs, introducing PLI schemes, and augmenting subsidies for small businesses, are eagerly anticipated. The financial services industry also expects key announcements pertaining to the management of Non-Performing Assets (NPAs). Despite the finance minister signalling a lack of major announcements in the forthcoming budget before the 2024 general elections, the FinTech sector remains optimistic about the government's commitment to implementing policies that foster sectoral growth, enhance outreach, and amplify India's digital presence.”
Mr. Aditya Gupta, Founder & CEO Credilio
“We are optimistic about the upcoming budget and hopeful that the focus on fortifying digital financial infrastructure demonstrates a commitment to advancing financial technology. After the recent regulatory enhancements, allowing tax breaks should create a conducive environment for fintech innovation, empowering fintechs to explore new avenues responsibly. We would be eager to see emphasis on incentivizing fintech in under-serviced areas which complements our objective of creating a robust distribution infrastructure for financial inclusion. Thus government support is pivotal in catalysing positive change at the grassroots level. Recognition of fintech's role in empowering MSMEs and SMEs, coupled with targeted incentives for Tier 2, 3, and 4 cities, should highlight a strategic push toward lasting financial inclusion. Additionally, the consideration of permitting NBFCs to offer credit cards acknowledges fintech's evolving landscape, showcasing a commitment to adapting to changing financial dynamics will be a big win for the financial sector and the nation.”
Ashish Singhal, Co-founder & Group CEO, PeepalCo
“India introduced its tax provisions for Virtual Digital Assets (VDA) two years ago, during the 2022 Budget. While the industry welcomed the definition and inclusion of VDAs in the Income Tax Act, certain provisions, such as the high TDS rate and the lack of offset have led many Indian VDA users to move to non-compliant foreign exchanges to trade, putting themselves at risk of losing their investment and breaking the law. It also led to lesser tax revenues for the exchequer. As an FIU-registered platform compliant with India’s KYC and PMLA rules, CoinSwitch urges the Government of India to consider the following: i) Reducing the Tax Deducted at Source (TDS) on VDAs, from 1% to 0.01% ii) Allow offsetting and carrying forward losses from the sale of VDAs iiI) and treating income from VDAs on par with other capital assets The Government of India has shown commendable leadership at the G20 to arrive at a roadmap for a global crypto framework. It has implemented domestic regulatory frameworks such as anti-money laundering that are in line with global standards. This could be the basis for India to reconsider its tax treatment of VDAs, which is an outlier, both domestically and internationally. Reducing the tax arbitrage that exists today will also help stem the flight of capital, consumers, investments, and talent, as well as dent the gray economy for VDAs.”
Ravin Saluja, Director, Sterling Agro Ind. (Nova Dairy Products)
"The Indian dairy sector is set to grow by 6% by 2024. Dairy is one of India’s largest agricultural commodities, accounting for about 5% of the national economy and directly engaging over 8 crore farmers. India is a proud leader in the world milk production market, but there are issues facing our sector, especially with rising feed and other raw material costs that lower yields. We hope that these important issues will be addressed in the upcoming budget, which will include policies that lessen the impact of growing production costs while also maintaining growth momentum. A well-thought-out and encouraging budget would surely strengthen the cornerstone of our dairy industry, guaranteeing a strong and prosperous future for the sector and the millions of farmers it supports."
Mr. Sarvjeet Virk, Co-founder & MD, Finvasia
"As we approach Budget 2024, we anticipate a continued focus on advancing India's digital public infrastructure, a key pillar for realizing the trillion economy dream. I look forward to enhanced government initiatives fostering financial inclusion benefiting Bharat, not just India. On the tech front, I hope to see further progress in establishing AI Centres of Excellence. I also expect more policies to enable public-private partnerships to boost end-use cases of generative and predictive AI and increase its adoption in India. The fintech industry, as usual, will be the flag bearer of innovation. Government support, both in terms of policies and funding, will be instrumental in propelling the fintech sector to new heights of success."
Mr. Roshan Shah, Co-founder & CEO, VoloFin
“The fintech industry is the backbone of India's economic growth and resilience. We expect the Interim Budget 2024 to recognize the potential and challenges of FinTech and provide an ecosystem to support and enable it to operate. VoloFin supports the continuous growth of exporters, from SMEs to large corporations, across industries and geographies, and delivers instant liquidity with no collateral through our state-of-the-art technology platform. We hope that the government will facilitate the adoption of trade financing, simplify tax and compliance standards, and promote financial digitization and innovation."
Anuj Arora, Co-founder & COO, SahiBandhu Gold Loans, the largest Gold loan Aggregator Platform
Speaking on the ‘expectations or recommendations for the Interim Budget 2024’ Anuj Arora, Co-founder & COO, SahiBandhu Gold Loans said, “We anticipate the Interim Budget 2024 to align with the government's mission of uplifting the underprivileged and urge the government to introduce beneficiary schemes, especially as the General Sabha election approaches, focusing on the socio-economic empowerment of the marginalized. Acknowledging the FinTech and tech-based gold loan industry's pivotal role in reshaping financial services, we hope for policies supporting our growth, particularly in Tier 2, 3, and 4 cities, aiming to integrate rural communities into the formal banking system. Incentivizing FinTech dedicated to empowering SMEs through financial and technical interventions would mark a significant stride. Addressing loan disbursement including loans against gold/jewellery, we recommend regulations fostering collaboration between traditional banks and digital lenders for accessible loans. With the budget on the horizon, SahiBandhu Gold Loans, the largest gold loan aggregator platform eagerly anticipates a budget that propels innovation and inclusion in the rapidly evolving FinTech and gold-tech landscape."
Budget Expectations for Cryptocurrency By Mr Edul Patel CEO of Mudrex.
"The Indian government's commitment to fostering innovation and responsible growth in the crypto industry is evident through its proactive measures. The implementation of taxation, integration of cryptocurrencies into anti-money laundering/counter-terrorist financing (AML/CTF) frameworks, and issuance of notices to non-FIU compliant foreign entities highlight its dedication to creating a secure ecosystem for investors and businesses. However, the current imposition of a 1% TDS on every transaction could potentially hinder cryptocurrency adoption. Addressing this concern proactively in the upcoming budget would be a prudent step, aligning with the government's broader objectives in supporting a robust and sustainable crypto ecosystem."
Interim Budget 2024 Expectations from Ashwini Shami, smallcase Manager, EVP & Portfolio Manager OmniScience Capital
“We believe spending on defence will continue. India is looking to become an exporting hub for defence. We already have attachés from more than 80 countries. It has become a significant part of the economy and the market over the last five years inspiring tremendous excitement. Overall, expecting the Amrit Kaal theme to continue from the budget - it will cater to the masses. Continued focus on capital expenditure is expected, in addition to the other focus areas that the government had maintained last year. This will be done while maintaining the fiscal deficit. No big announcement expected for the start-ups ecosystem, but the government will definitely be doing right by start-ups in the longer horizon. The government has done well in building the start-up ecosystem with the introduction of building blocks for start-ups; Aadhar and UPI. Gift City is a beautiful example of the government’s start-ups focus, riding on technology transformation. Railway will be the most important plug in the logistic space. Dedicated freight corridors operational by end of FY '25. Focus on infra will continue in line with previous policies. We are also bullish on financial services. There will be a need for capital formation and servicing companies for the same. Then of course, we are all positive about IT. The project pipeline in IT is quite healthy. As for the markets, we foresee no Immediate reaction with the budget announcement. The announcement comes soon after the Fed announcement on the 31st, hence the market reaction for the next few weeks will be from a combination of the budget and the Fed announcement.”
Mr. Aryaman Vir, CEO of WiseX
“As the interim budget nears, we at WiseX are closely watching for the expected rise in the 80C tax deduction limit to ₹2.5 lakh, which could greatly benefit taxpayers. Our focus on alternative investment and real estate has us keenly aware of the need for reform in long-term capital gains taxation. With the current 20% tax rate after indexation on real estate for holdings beyond 24 months, we're advocating for more favorable policies to encourage investment in this crucial sector. We're also optimistic about the proposed enhancements in financing, which are vital for real estate sector growth. The government's initiative to create AI centers of excellence signifies a dedication to technological advancement, with effects that will extend throughout the economy and invigorate the real estate market. Supporting incubators and accelerators for startups is not merely about fostering innovation; it's about preserving consumer confidence in the rapidly expanding domains of AI and ML, which is paramount for a trust-based relationship with technology.”
Mr. Saurabh Birari, CFO, Switch My Loan Budget Expectations
"We believe that the upcoming budget presents a pivotal opportunity for India to pave the way for inclusive and sustainable financial growth. As businesses eagerly anticipate the fiscal roadmap, SwitchMyLoan emphasizes the need for a comprehensive approach to address the evolving landscape of the financial sector. Firstly, we advocate for a thorough examination of initiatives geared towards expanding access to credit and banking services, particularly for marginalized or unbanked populations. Underserved Markets, often hampered by infrastructure gaps, merit special attention in budgetary considerations. The budget must encourage and incentivize financial institutions to extend their services into these areas, thus contributing to the overall development. In this era of rapid technological advancements, the budget's stance on digital transformation in lending is of paramount importance. Embracing and promoting technological innovations in the lending space will not only enhance efficiency but also empower businesses to better serve their customers in an increasingly digital world.”
Pre Budget Expectations - EV Financing
‘From the interim budget, we expect more well-defined action plans to strengthen digital infrastructure and promote digital payments for deeper financial inclusion. More robust and long term and clearly defined incentives for the adoption of EVs will also help in the growth of the auto finance sector. Inclusion of EV financing as a priority sector lending shall help and translate to lower cost and increase adoption. At large, fintech players are seeking a GST subsidy to enhance the accessibility of financial services and government benefits. With the fintech market expected to reach INR 11.36 Trn by FY 2028, we are aligned with the growth potential of the fintech sector in India and hope that the government will take steps to support the industry’s growth in the upcoming budget, said Mayank Thatte, Chief Financial Officer , Rupyy.
Sarbvir Singh, Joint Group CEO, PB Fintech
"There’s a need to rethink taxes on the insurance category as a whole to find a fair balance. To begin with, the maximum deduction limit of Rs 1,50,000 under Section 80 C gets exhausted owing to other allowable expenses like PPF, loans, etc. It’s time we declared a dedicated exemption category just for term insurance to fill this gap. This will also incentivise taxpayers to opt for a term plan with higher coverage. Also, a GST rate of 18% needs to be reconsidered. It's time to relook at the tax structure so that the pricing benefit reaches the end consumer and encourages more people to invest in life insurance. Besides, individuals tend to defer retirement planning until later which is not a financially prudent decision. To address this, it’s important to ensure an equal tax treatment for pension products which will also ensure a fair play with NPS. Pension and annuity products deserve the same tax treatment as the National Pension Scheme (NPS). This would level the playing field, making these products more attractive for long-term financial planning. The existing system imposes tax on full annuity income including both principal and interest. To promote wider adoption of pension products and ensure parity with other investment avenues, we recommend considering a tax-free status for annuity income derived from these pension products. This would serve as an incentive for individuals to secure their retirement and also align pension products with prevailing tax norms. Also, the importance of health insurance in the post-pandemic world cannot be emphasised enough. Considering the several innovations in the health insurance space, the sector definitely needs some innovations in tax structuring too. One aspect could be to increase the maximum deduction limit for self, spouse, and dependent children to Rs 50,000 and for senior citizen parents to Rs 1 lakh. Beyond this, tax exemptions should also be extended to Health Savings Accounts which will give people more in-hand money to plan for rising healthcare expenses. Group health insurance is a fail-safe way to make insurance more scalable and accessible for the masses, and so, it needs to be incentivised more. Employee health insurance is a critical part of MSMEs strategy in hiring and retaining workforce. However, what makes this even more expensive for businesses is that they cannot take input credit for GST paid on employee health insurance. While it might not be feasible for the government to waive it off for oganisations of all sizes, it should at least be considered for MSMEs as they form the backbone of India’s entrepreneurial future."
Pre-Budget Expectations On Behalf of Shailendra Singh, MD & CEO, BOB Financial
“India is experiencing a significant surge in the utilization of credit cards, particularly with a five-fold rise in demand for travel financing. In light of this, the government should look at exempting international spending of up to Rs 7 lakh from the existing 20 percent Tax Collected at Source (TCS) in the upcoming FY25 budget. This proposed measure aims to boost cross-border commerce, ease transactional complexities for consumers, and stimulate the tourism and hospitality sectors. By fostering a conducive environment for global transactions, we aim not only to enhance the cardholder experience but also to contribute to the overall economic growth. In addition, we urge the government to continue its commendable efforts in strengthening the digital infrastructure while prioritising security of the consumers. Initiatives like UPI integration strongly reflects regulator’s commitment to innovative solutions, furthering financial inclusion and paving the way for a digitally empowered future.”
Pre budget expectation on education sector
Ms. Radhika Shrivastava, Executive Director, Fortune Institute of International Business (FIIB) said, "Over the past decade, the educational landscape in India has undergone a strategic and forward-looking transformation, marked by budgetary allocations that mirror the government’s dedication to driving transformative reforms. In the year 2024, we look forward to a financial roadmap that integrates with the strategic objectives set forth in the NEP 2020 along with allocations for flagship initiatives like Samagra Shiksha, Eklavya Model Residential Schools, and the Skill India Programme. Our expectation is for an increase in budget allocation, aspiring to elevate education funding to 6% of the GDP, doubling our current commitment. Emphasizing progress, we advocate for intensified investment in digital infrastructure, enhancing accessibility for learners. Concurrently, there is a vital need for substantial investments in teacher training, particularly in cutting-edge technologies like AI, to revolutionize the teaching-learning landscape. This collective vision ensures a future-ready education ecosystem, a testament to our commitment to excellence in learning."
The 2024 budget will not be a full budget but rather a vote on the account
“The 2024 budget will not be a full budget but rather a vote on the account so one can expect a populist budget. Adhering to the customary practice of an interim budget, significant announcements are not anticipated, as reiterated by the finance minister. However, there is speculation that sectors such as affordable housing, aligned with welfare spending, may receive a notable boost. The government is also expected to maintain some degree of fiscal discipline to meet the fiscal deficit targets by FY26. And since the revenue collection is above the estimates in recent months different stakeholders of the economy, especially the middle class, would also be expecting some tax relief. The government should stick to the trend of fiscal discipline keeping in mind long-term sustainable prosperity for the nation. The Indian populace is smart enough now to comprehend the adverse repercussions of populism, drawing lessons from recent instances in countries such as Sri Lanka," said Shauryam Gupta, CEO at Rupeezy.
Govt. should exempt insurance policies from GST in this budget: InsuranceDekho's Founder
"In the upcoming budget, we anticipate that the finance minister will exempt insurance policies from GST, which will bring down insurance premiums. This step will increase insurance affordability and help fulfil Prime Minister Modi’s dream of insurance for all Indians by 2047. Additionally, we expect the government to increase the tax exemption limit under 80C, which will encourage savings, promote insurance coverage, and stimulate economic growth. Various studies have shown that increased insurance penetration has a multiplier effect on the economy by reducing overall financial distress and making long-term growth capital available to important nation-building industries" said Mr. Ankit Agrawal, Founder & CEO, InsuranceDekho.
Pre-Budget Expectations On Fintech Industry On Behalf of Mr. Rohit Gajbhiye, MD and Founder of LEO1
The Fintech industry in India is looking forward to the upcoming Union Budget with high expectations. The industry has already experienced regulatory reforms in the past year, and it anticipates that the upcoming budget will further promote financial inclusion. The enhancement of digital infrastructure and connectivity is essential to ensure the seamless operation of Fintech services across the country. The government should also facilitate a conducive regulatory environment that promotes innovation while safeguarding consumer interests. Additionally, incentivizing investment in Fintech startups and R&D initiatives can further bolster the industry's dynamism. The financial services industry also expects key announcements pertaining to the management of Non-Performing Assets (NPAs) and credit guarantee schemes for MSMEs. The industry is also expected to see a significant increase in focus and spending on artificial intelligence, machine learning, green finance, open banking and cybersecurity to better support the entire ecosystem.
Pre-Budget Bond Market Expectation On Behalf of Pankaj Pathak, Fund Manager (Fixed Income), Quantum AMC
The interim union budget for 2024-25 will be presented on February 1, 2024. As has been the custom, the government may not announce any major policy changes in the interim budget ahead of Union elections. So, the key focus area from the market’s perspective, would be the government’s fiscal deficit target and market borrowing numbers. Given the Indian economy is showing steady growth trend, the government will likely continue with the fiscal consolidation plan to bring down the fiscal deficit to 4.5% of GDP by FY 2025-26. Based on this glide path, for the FY 2024-25, fiscal deficit target should be around 5.3% of GDP. Government’s borrowings from the bond market in FY25 might be lower than last year by around Rs. 500-700 billion. We expect the gross market borrowing of around Rs. 14.8 trillion and net market borrowing around 11.2 trillion in FY25. Lower market borrowing from the government coupled with rising demand from long term investors like PF, pension and insurance companies makes the demand supply balance favorable for government bonds. Demand for bonds will also be boosted by India’s inclusion in the global bond indices. We expect demand for bonds to outpace its supply in 2024. Thus, bond yields will likely go down and bond prices move higher. Since longer term bonds are more sensitive to yield changes, we expect long term bonds to perform better in 2024.
Pre-Budget Expectations On Taxation & Investments
According to Sanket Sinha, Global Head of Asset Management, Lighthouse Canton, India has emerged as an important destination for venture capital on the world stage & is ranked currently as the third largest start-up ecosystem in terms of the number of unicorns. We are making a significant mark on the global stage, however, there is still ample scope to make it more conducive for participants from a regulatory standpoint. Especially on the taxation front, simplification and parity are crucial elements for putting unlisted equity at par with listed equities, both in terms of tax rates as well as holding period for defining LTCG & STCG. This has been a long standing expectation from the industry as a whole and we hope that the same is met in the upcoming union budget. Additionally, the taxation on ESOPs needs a serious relook. In the current tax regime the ESOP holders are liable to pay tax at the time of exercising the ESOPs which is not a liquidity event. The industry expectation is that the incidence of tax should occur at the time of sale of shares rather than at the time of exercising. Another recent development that needs attention is the RBI circular dated Dec 19th 2023. It suggests sweeping restrictions on regulated entities on making investments in AIFs. While the circular is with good intent of curbing the problem of evergreening by a few REs (Regulated entities), in the current form the circular restricts REs from investing in AIFs that have downstream investments either directly or indirectly in a debtor company of RE irrespective of the asset class the AIF is operating in. Therefore it covers all AIFs whether its VC or Private Debt or Venture Debt. We hope there will be further clarification on the same by the finance ministry / RBI. Also the REs have been instructed to either redeem or provision for 100% of the amount already invested in the AIFs within 30days of the issuance of the circular, which have downstream investments either directly or indirectly in a debtor company of RE. Since almost all the private market AIFs are closed ended redemption will not be possible and the only option left with REs will be to make provision for any such existing investments. What we need to understand here is that REs have been important & large contributors for AIFs, especially in the private debt space and this change will negatively impact the institutional funds raised by these AIFs going forward in a big way.
Railways, infrastructure, and capital goods companies are poised to remain in the spotlight
According to Pranav Haridasan, MD and CEO of Axis Securities, the interim Budget will retain the growth roadmap and reaffirm the government's commitment to long-term growth, with a continued focus on infrastructure development. The impact of the Union Budget on the equity market has reduced notably over the past few years, with the government undertaking most of the reforms outside the purview of the Budget. Nonetheless, the market participants continue to view it as a critical catalyst stimulating the growth of the Indian economy and, thereby, the Indian market. With the Budget being an interim one and a vote on account, we do not see significant announcements in this Budget. However, we expect key policy reforms, such as Atmanirbhar Bharat, Make in India, and the PLI scheme, to continue and receive further impetus in FY 25. There may be an increased emphasis on power, utilities, and renewables. Railways, infrastructure, and capital goods companies are poised to remain in the spotlight with higher capex spending. Automobiles and FMCG are likely to get a boost from higher rural spending.
Budget Expectations On Behalf of Sandeep Kulkarni, Chief Operating Officer, Allcargo Gati Limited (formerly GATI)
As the country’s economic growth is gaining accelerated momentum and the key sectors are witnessing strong domestic and global demands, the logistics industry requires a robust infrastructure and policy push from the interim budget to build superior operational and efficiency to meet the growing demand and enhance overall competitiveness in the global logistics landscape. As the country is making significant progress towards becoming a global manufacturing hub, the logistics industry has an enabling role to play to catalyse the rise. In addition, an efficient logistics infrastructure and operational framework will eventually strengthen the ease of doing business narrative. Apart from continuing the capex push for multimodal transport infrastructure development consistent with National Logistics Policy, the budget needs to propose incentives in terms of tax benefits to attract private sector investments to strengthen last-mile connectivity in the form of building warehousing and transportation networks. As the growth of the digital economy is driving e-commerce progress, the budget should propose measures, provisions or policy support which will encourage new-age data-driven technology adoption to enhance supply chain agility, responsiveness and resilience. With environmental sustainability emerging as a dominant theme in the logistics and supply chain industry and more and more logistics companies adopting the principles of green logistics, the interim budget needs to propose incentives to encourage renewable energy adoption, EV deployment, etc.
Major public capex is unlikely
"There is a high level of uncertainty about the possible proposals in the interim budget. The finance minister had gone on record stating that “there won’t be any spectacular announcements” in the interim budget. So it is most likely to be a vote on account plus some possible relief in income tax for the lower income tax slabs. Major public capex is unlikely since the FM has to achieve the fiscal deficit target of 5.9 percent for FY24 targeted in the 2023 budget. Also the massive public expenditure done through the budget provision last year has helped in triggering growth in the Indian economy. Therefore, the government’s priority would be to achieve fiscal discipline," said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Rachit Chawla, Founder & CEO, Multyfi
"In the upcoming Union Budget 2024-25, we expect the Finance Minister to prioritize three major factors for the growth of our economy. Firstly, incentivizing digital payments by providing tax breaks in GST for merchants and offering tax benefits to organizations contributing to the vision of Digital India. Secondly, a strong focus on investment in technology, specifically enhancing data security measures for digital payment platforms. Strengthening the digital public infrastructure will foster innovation in fintech, promoting financial inclusion. Lastly, addressing liquidity concerns by considering partial guarantees on bank loans to smaller NBFCs. This will not only instil confidence in larger banks but also stimulate lending. As our industry strives to recover from the pandemic's impact, a well-planned and continuous support from the government is crucial. We anticipate increased stimulus, especially for sectors hit hard by the crisis, and a strategic push towards a more digital-oriented banking system to propel India into a truly Digital Payments nation."
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