Budget 2024 Expectations Highlights: Aviation sector expert reflects on Budget 2024’s impact

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“Given the crucial role of MSMEs in driving the country towards the $5 trillion GDP target, we expect not only easier credit norms, but steps to support them in the highly competitive international arena,” said Rajesh Sharma, managing director at Capri Global Capital Ltd. 

“We also expect women entrepreneurs promoting MSMEs to get more support in terms of easier credit. Home buyers could be given more tax benefits – both on principal and interest paid, helping people in urban and semi-urban areas to realise the dream of having a roof over their head. Rural infrastructure will continue to get higher allocation, driving growth in these areas,” said Sharma. 

“We believe this budget will balance fiscal responsibility with initiatives that foster growth, leading to a strong and resilient economy,” he said. 

“Without deviating from the current framework of prudent fiscal policy, we anticipate that the July 2024 Union Budget will include a combination of

(1)Increased capital expenditure targets,

(2) Larger allocation to the rural and agricultural sectors, and

(3) More fiscal consolidation.

There may be space in the July 2024 budget to enhance funding for capex – including highways, trains, and perhaps even state loans. Given the intent and state of finances, there is a possibility of seeing an overall capex expansion of 20-25 per cent versus FY24 (up from 17 per cent in the interim budget announced in February 2024),” said Alok Agarwal, head of quant and fund manager of Alchemy Capital Management.

“The government’s plan to expand production-linked incentives (PLI) for small textile enterprises, with the goal of increasing garment exports to $50 billion by 2030, is a positive initiative. However, to truly empower India’s SMEs and help them achieve this target, further measures are essential,” said Ankit Verma, Indian Subcontinent Head at Air8.

“It is crucial for the government to ensure that SMEs, which are often underserved, have access to affordable financing. Enhancing the availability of invoice factoring services can mitigate the risks associated with international buyers, providing a safety net for small enterprises. Additionally, accessible trade financing facilities will enable these enterprises to modernize, grow, and compete on a global scale,” he said. 

“By addressing these needs in the new budget, the government can provide the support necessary for small textile enterprises to thrive and contribute significantly to the nation’s export goals,” said Verma. 

“India is a country with the highest youth dividend. We are at a crucial juncture where we need to turn this dividend into constructive nation-building. Otherwise, we risk the boom fading out.

The nation is now witnessing a new wave of aspiration, and capital is a means to achieve and drive ourselves toward it. It’s essential to work towards nurturing the capital ecosystem, where we need fund of funds that can focus on diverse strategies, especially first-time funds that can do a bit more heavy lifting in both debt and equity segments,” said Rahul Gupta, founder and managing partner at ValuAble India.

“We must build a holistic ecosystem where we equally focus on Debt as we do on Equity; the government should take the lead and develop a holistic capital ecosystem. Both Venture Capital & Venture Debt are important wheels of the capital ecosystem. Still, VD is crucial in today’s market as it provides businesses with the necessary liquidity to navigate challenges and seize growth opportunities,” he said. 

“We need newer energies, ideas, and leadership in the market, making it holistic and inclusive, driving sustainable growth that will benefit all stakeholders. By fostering innovation and inclusivity, we can create a robust and resilient economy that harnesses the full potential of our capital and paves the way for a prosperous future for all,” said Gupta.

“We expect the budget to be a balancing act between welfare spending & capex expenditure thus not distorting the fiscal prudence shown till now. The government will aim to provide the necessary impetus to lower the pyramid of consumption & rural recovery which has been a mixed bag so far,” said Pradeep Gupta, executive director and head of investment at Lighthouse Canton. 

“The Capex multiplier for India is 2.5 times hence continued momentum on that front will be a welcoming scenario that essentially ensures sustained quality of spending. We also expect an expansion of the PLI scheme to other sectors as well given the thrust around manufacturing at large,” he said. 

“This is of critical significance given the $ 1 trillion export target set out by the Government of India by FY28, its spill-over effect & overall contribution to job creation. Lastly, any change in equity taxation to ensure standardization will not be well received and do not augur well for secular financialization of savings,” said Gupta. 

“The salaried class has always kept high expectations from the budget, but the last few budgets have been quite disappointing in terms of opportunities to optimize tax and potential for long-term savings with higher returns,” said Mahesh Krishnamoorthy, Managing Director, Core Integra.

“Few asks could include raising the basic exemption slab to at least 5 lacs and simplifying the tax rates to 10%, 20% and maximum 30% along with eliminating the surcharge and cess. Sec. 80C limits could be enhanced to at least 3 lacs from the current 1.5 lacs. Interest limits on housing loans and principal repayments could be enhanced further. Income Tax Returns could be simplified for Employees who have no other source of income other than salary, the submission by Employer along with TDS as applicable must be considered as auto filing of returns,” said Krishnamoorthy. 

“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, said, Harshit Jain, Founder & Global CEO, Doceree

Ishver Dholakiya, Founder and MD, Goldi Solar, said, “With climate change as one of the key global concern, we believe the green energy charter will be on priority in the upcoming union budget 2024 as India currently at 150 GW has set an ambitious target of achieving a renewable energy capacity of 500 GW by 2030. Further, with a focus on ‘Make in India’, and improving ease of doing business, India has become one of the preferred destinations for global companies and is on the road to becoming the third third-largest economy in the world with a GDP of $5 trillion making green energy a top focus to achieve its Net Zero goals. PM Narendra Modi’s recent address in Russia underlined India’s commitment to renewable energy. In fact, the Government’s focus has been clear with the recent progressive policy and regulatory reforms such as ALMM, PLI scheme, PM Surya Ghar, PM Suryoday Yojana and more.

“At Quantum, we are optimistic about the upcoming budget 2024-25 and anticipate favorable announcements and clear policy implementation. We look forward to targeted incentives, like FAME 3.0, which could make electric two-wheelers more affordable for everyday commuters, thereby expanding our market presence. Additionally, reducing GST on EVs and offering higher purchase subsidies could remarkably boost consumer adoption. As an industry player, we anticipate more support for local battery production and innovation, which are critical for the sustainability and cost-effectiveness of EVs. Increased backing for the ‘Make in India’ initiative and the localized manufacturing of our electric two-wheelers could enable Indian EV manufacturers like us to create more efficient and sustainable mobility solutions that can compete with international brands and are accessible to a broader consumer segment. Simplifying and enhancing financing options for EV purchases will also play a crucial role in boosting adoption rates. Furthermore, we hope for policies that support the development of a robust charging infrastructure, including incentives for renewable energy-powered charging stations, to ensure seamless and eco-friendly commutes. Support for research and development, as well as export incentives, will help us innovate and expand our global footprint. Such comprehensive measures could enhance the overall EV ecosystem and support the transition to electric transportation, making green commuting a reality for millions. –said Mr.Chakravarthi C. Managing Director, Quantum Energy

V.P. Singh, Program Director for PGDM and Professor of Managerial Economics and Statistics at the Great Lakes Institute of Management, emphasizes that one of the primary hurdles to realizing the ‘Viksit Bharat’ (Developed India) vision is the significant disparity in IQ levels between India and competing nations. India, with an average IQ of 77 and a global rank of 96, faces stiff competition from China, which boasts an average IQ of 104 and ranks 5th globally.

Singh asserts that substantial efforts are required to elevate the national IQ level, especially given the crucial role of cutting-edge technologies in driving global growth. Beyond general IQ improvements, Singh advocates for enhancing the nation’s Artificial Intelligence quotient, necessitating a substantial boost in the education sector this year.

“Just as significant investments were made in agriculture in 2019 and capital expenditure in past budgets over the last decade, it is now imperative to focus on education,” Singh stated. He further highlighted that the knowledge economy’s proportion is rising globally, and increased spending on education will support growth across all sectors.

Vidya Mahambare, Union Bank Chair Professor of Economics and Director at the Great Lakes Institute of Management, has highlighted a significant target of the National Education Policy (NEP) to elevate the Gross Enrolment Ratio (GER) in higher education to 50% by 2035. Currently, GER stands at approximately 28%, representing the proportion of the 18-23 age group enrolled in higher education.

Mahambare emphasizes that while increasing the demand for higher education is crucial, India faces a severe shortage of quality educational institutions and qualified faculty. This supply crunch poses a significant challenge to achieving the NEP’s ambitious goal.

“Utilizing technology and expanding online education are the only viable solutions to accommodate millions of additional students seeking higher education,” said Mahambare. However, she pointed out that the government must implement robust supervisory measures to ensure the quality and effectiveness of higher education. Monitoring and improving learning outcomes in online education is particularly challenging compared to traditional methods, which themselves suffer from inadequate learning results.

Hitesh Avhad, Managing Director, Avhad Group, said, “The real estate sector serves as both a major catalyst for economic growth and a vital provider of employment in India. As we look towards the Union Budget 2024-25, there is an urgent need for the sector to be granted industry status, which would facilitate access to lower-cost financing and tax benefits. High taxes on essential materials such as cement and steel, particularly the 28% GST on cement, are inflating project costs and must be addressed to sustain growth.”

“Implementing a single-window clearance system would significantly streamline approval processes, accelerating project timelines and reducing costs. Additionally, enhancing tax benefits for homebuyers by raising the deduction limit for home loan interest payments and providing income tax relief on second homes would spur demand and make homeownership more attainable.”

“The sector’s growth is vital not just for economic metrics but for improving the livelihoods of millions, particularly casual laborers. By addressing these pressing issues in the upcoming budget, the government can ensure sustained growth in the real estate sector, drive job creation, and stimulate broader economic development.”

Nimesh Chandan, CIO, Bajaj Finserv Asset Management, said, “Indian economy is moving on a strong growth trajectory. This makes the government finances comfortable on the revenue side. The Budget is expected to maintain the fiscal deficit and borrowing targets same as the February interim budget. There could be some positive announcements on allocations towards rural economy. Also, there is a possibility of tax benefits for the lower income brackets. Focus on capital expenditure is also expected to continue with increasing central expenditure, persuading state level capex and also incentivising private capex. Overall, we are likely to see policy continuity.”

Vishal Bali, Executive Chairman, Asia Healthcare Holdings, said, “India’s Budget 2024-25 comes on the back of a changed political environment in India however India’s growth story and potential in a world reeling under economic pressure remains more optimistic than ever. This is an opportune time for India to strike a balance between capital conservation and undertaking some aggressive reforms. The government has already indicated that the forthcoming budget would be aimed at sustaining the current economic growth trajectory of India. Countries aiming for self-sufficiency by driving domestic manufacturing as well as consumption would be the ones to float through swiftly in this much-anticipated economic turmoil.”

Kapil Bardeja, CEO and Co-Founder, of Vehant Technologies, said, “Looking ahead to the forthcoming budget, the recent election results provide a unique opportunity to reflect on India’s evolving aviation industry. The interim Budget 2024, presented by Finance Minister Nirmala Sitharaman, aims to double airports to 149 and introduce 517 new air routes, highlighting a commitment to infrastructure as a driver of economic growth. A significant trend in recent budget allocations is the emphasis on modernization and indigenization. The government’s “Make in India” initiative has spurred the development and production of advanced technologies to enhance security within the country. There is a significant increase in budget allocation and this increase aims to tackle the changing security challenges and ensure the armed forces are fully equipped to handle any threat. This development not only promises to elevate passenger experience but also significantly boost tourism and create myriad economic opportunities. We are excited to contribute to this new chapter in India’s aviation story, ensuring security and seamless travel for all.”