Industry Reaction to Union Budget 2024

Hyderabad, July 23, 2024: The 7th Budget presented by the Union Finance Minister Ms Nirmala Sitharaman was very good. It was a progressive budget, a pro-development budget that attempted to lay a strong foundation for Vikasith Bharath, said Mr Suresh Kumar Singhal, President of the Federation of Telangana Chambers of Commerce and Industry (FTCCI), a 107 years old trade and commerce body.

We could see the intellectual architecture of our finance minister Smt Nirmala Sitharaman all along the budget she presented, Singhal said. 

Suresh Singhal was addressing the media at Federation House in Red Hills, along with his colleagues, committee chairmen, and industry veterans after the union budget presentation was over

He welcomed the finance minister’s proposal to give a fillip to the MSME sector, and four priority areas such as Employment, Skills, MSME, and Middle Class. 

Singhal also welcomed the proposal to open new SIDBI branches to expand its reach to serve all major MSME clusters within 3 years and provide direct credit. With the opening of 24 such branches this year, the service coverage will expand, he added. 

Further, he hailed the simplification of FDI policy to attract foreign investments. He welcomed under the new tax regime as a result of which a salaried employee in the new tax regime stands to save up to Rs 17,500/- in income tax, Singhal added. This helps people have more money in their hands, he added.

He lauded the proposal to abolish angel tax for all investor classes which will immensely boost investments in startups 

It is the right move to review the Mudra loan cap which is now increased to Rs.20 lakh from Rs.10 lakh to empower entrepreneurs, said Ravi Kumar, Senior Vice President of FTCCI. However, he quickly added that entrepreneurs must make use of it well. 

Srinivas Garimella, Chair of the Industrial Development Committee of FTCCI felt overall the budget was a very good one. He lauded the finance minister for giving a huge boost to MSMEs; a Rs 100 crore credit guarantee scheme for manufacturing MSMEs. 

A lot of focus was given to ease of doing business, and a lot of areas are getting simplified which is very good, he said. 

Irshad Ahmed, Chairman of GST and Customs Committee of FTCCI said the stock markets reacted with shock due to a hike in long-term capital gains tax from 10% to 12.5% for all financial and nonfinancial assets and short-term capital gains tax from 15% to 10% along with an increase in Securities transactions tax. He termed it as balancing budget with a development orientation.

The budget didn’t have any dramatic changes, he added. The minister focused on the right sectors like MSME, and skilling because India has a 56 crore working population. Out of this 11.4 crore are in manufacturing besides a large chunk working in the agriculture and services sector said Irshad Ahmed. This will enhance employment potential, he added. 

Speaking further, Irshad said India needs to generate 78.5 lakh jobs a year on average until 2030 in the non-farm sector to cater to the rising workforce. Keeping that in mind, incentives were announced for new employees. Dedicated hostels for working women and credit gguarantees to MSMEs are a few positive attributes of the budget he added 

Speaking about Telangana, he said that not many specific benefits were announced but one noteworthy thing is the allocation of Rs 1.5 lakh crore for states to support their infrastructure projects. As most of our state’s revenues go towards welfare measures, Telangana state is left out with any money for infrastructure development. Hence, this Rs 1.5 lakh crore is a ray of hope provided if we manage to get a large chunk of it, at least for the RRR project, he said.

Sudhir, CA and Chairman of the Direct Taxes Committee of FTCCI said the budget laid a strong foundation for the union governments’ goal of reaching a five trillion economy. To reach that stage, we need good industrial growth. For this, we need a huge skilled wworkforce. The budget deservedly addressed those areas. 

He welcomed raising the standard deduction to Rs 75,000 from the current Rs 50,000. Salaried employees will now stand to save money, he said. 

The finance minister as expected boosted the startup sector by abolishing the tax on the earnings of Angel Investors which will boost their investments 

Smt. Bhagwati Devi Baldwa, Chair of the Ladies Wing and Women Empowerment Committee, said half of the population is women. The minister announced a focus on increasing women's workforce participation by establishing hostels and creating partnerships for women-specific skilling programs. To boost job creation in the manufacturing sector, a new scheme was also announced. Overall, the budget was pro-poor, women, youth, and Kisan, she said. 

Meela Jayadev, immediate past president of FTCCI welcomed the 10-lakh loan scheme unveiled to support higher education within the country.  This will help many poor to pursue their higher studies, he added

Representing the Tourism Committee its co-chair D. Ramchandram welcomed the initiatives announced to boost tourism such as the development of temple corridors, Nalanda University, Natural Landscapes, and Pristine beaches among others as world-class pilgrimage and tourist destinations others. But that was not sufficient.  The industry was looking for more benefits such as industry status, tourism policy, etc. Many key demands such as granting infrastructure status, increase in marketing budgets, and reduced GST rates on Hospitality and Tourism sectors along with a few others were unmet he said.