Union Budget 2024
#GTonBudget | Our leaders share their insights on the Union Budget 2024-25.
Akhil Chandna , Partner, Tax, Grant Thornton Bharat
"The Finance minister has increased the deduction available on employer’s contribution to National Pension Scheme (NPS) for private sector employees from 10% to 14% of salary, in case employee opts for the new tax regime. Additionally, a new scheme has been introduced in the form of the National Pension Scheme known as ‘NPS Vatsalya’ which will be a plan for contribution by parents and guardians for minors. On attaining the age of majority, the plan can be converted into a normal NPS account. While the detailed schemes are awaited, these proposals are a welcome move aimed at channelising savings towards pension plans."
Akhil Chandna , Partner, Tax, Grant Thornton Bharat
"With an aim to boost the confidence of middle class taxpayers, several announcements are made specially for the taxpayers opting for the new tax regime — from reducing the tax slab rates for individuals resulting in saving of up to Rs 10,400 on taxable income above Rs 15 lakh. Increasing the standard deduction on salary from Rs 50,000 to Rs 75,000 and as well as Increasing the threshold for deduction on employer contribution to New Pension Scheme from 10% to 14% of salary."
Akhil Chandna , Partner, Tax, Grant Thornton Bharat
"The limit of exemption of capital gains on certain financial assets has been increased to INR 1.25 lakh per year, but the savings would be offset by the increase in rate of tax on short-term and long-term gains, resulting in higher tax flows for such taxpayers. Overall, it's a pragmatic move with a lot to offer for the crucial middle-class taxpaying constituency."
Ashish Chhawchharia , Partner and Leader - Debt & Special Situations, Grant Thornton Bharat
“Increasing the strength of Tribunals in the country and announcement of Integrated Technology Platform for the IBC ecosystem in the budget today will foster even better outcomes for what has been one of the landmark economic reforms in India."
Ashish Chhawchharia , Partner and Aviation Industry Leader, Grant Thornton Bharat
"The recent budget announcements signify a strong commitment to developing the entire Indian aviation ecosystem to cater to the growing market. By extending the time periods for export of good imported for repairs at India MROs and vice- versa, it eases the woes of airline operators in India and improves attractiveness of MROs set up in India. Also the focus on building new airports and positioning India as a global tourist destination, will stimulate investments and job creation in India."
Chirag Jain , Partner and Food Processing Industry Leader, Grant Thornton Bharat Tourism
"Focus on tourism will transform Brand India. By highlighting new destinations like Odisha, promoting sustainable tourism, and revitalising ancient temples and pilgrimage sites, India is set to become a 'must-see, must-visit' global tourism destination."
Dharmender Jhamb , Partner and Fintech Industry Leader, Grant Thornton Bharat
"Abolishing the angel tax on all asset classes significantly boosts the startup ecosystem, attracting diverse investments and fostering innovation. This will support the startup and investor ecosystem sustain its momentum and encourage long-term growth."
Krishan Arora , Partner, Tax, Grant Thornton Bharat
"New and additional employment incentives across manufacturing and other sectors will encourage workforce growth and bolster the Make in India initiative. These incentives complement existing PLI schemes and income tax benefits for hiring additional employees."
Krishan Arora , Partner, Tax, Grant Thornton Bharat
The Finance Minister in her speech announced further simplification and rationalisation of the GST regime, including its extension to other sectors in the near future. This suggests the government's intent to rationalise GST rates and possibly include petroleum products, a long-standing request from the industry.
Nittin Arora , Partner and Telecom Industry Leader, Grant Thornton Bharat
"The government's proposal to increase BCD on PCBA for telecom equipment while reducing BCD on mobile phones, accessories, and chargers can be seen as a step towards achieving 'AtmaNirbhar Bharat' (self-reliant India) goals."
Naveen Malpani , Partner, FMCG & Consumer Goods Industry Leader, Grant Thornton Bharat
"The government's initiative under the PM Aawas Yojana, with an allocation of INR 10 lakh crore and incentives for youth skilling, is expected to significantly boost the fast moving electric goods market."
Naveen Malpani , Partner, FMCG & Consumer Goods Industry Leader, Grant Thornton Bharat
"The allocation of INR 10 lakh crore under the PM Awas Yojana to address housing needs for 1 crore urban poor and middle-class families will boost affordable housing. This is expected to enhance consumer spending and financial stability, leading to increased demand for consumer goods and services. It will also help stimulate the FMEG market in India, which has been struggling with inflation recently."
Naveen Malpani , Partner, FMCG & Consumer Goods Industry Leader, Grant Thornton Bharat
"The government's initiative under the PM Aawas Yojana, with an allocation of INR 10 lakh crore and incentives for youth skilling, is expected to significantly boost the fast moving electric goods market."
Krishnan PS , Partner, Tax, Grant Thornton Bharat
"Customs reforms will continue to encourage domestic manufacturing, local value addition, and boost exports. The customs duty structure needs to be rationalised to support these objectives."
Pallavi Joshi Bakhru , Partner and Leader – Family Offices, Grant Thornton Bharat
"The proposal to impose TCS on luxury goods aims to track high-value spending, assuming it's from post-tax income. Despite a small tax base, India has a substantial consumption of luxury items. A similar move was made with the Finance Act 2020, which introduced 1% TCS on art sales over INR 50 lakh. Other covered transactions include overseas tour packages, jewellery or bullion sale over INR 2 lakh, purchase of motor vehicles over INR 10 lakh, and remittances under the Liberalised Remittance Scheme. It will be interesting to see which luxury items will be subjected to TCS."
Prasenjit Sarkar , Director, Regulatory and CFO Services, Grant Thornton Bharat
"A significant revision to the Internship Scheme now allows top 500 companies to allocate 10% of internship costs through Corporate Social Responsibility (CSR) funds. This innovative approach enables corporations to play a key role in developing 1 crore young talents over next 5 years by bridging the skills gap, and enhancing employability. By leveraging CSR funds, companies can make a positive impact on students' professional journeys while fulfilling their social responsibility commitments. This initiative aligns with national objectives, driving sustainable growth, reducing unemployment, and harmonising industry needs with educational outcomes. This change is expected to have a profound impact on the lives of young professionals and the future of our workforce."
Priyanka Duggal , Partner, Tax, Grant Thornton
"With an aim to bolster the Indian start-up eco-system, the entrepreneurial spirit and support innovation, the Budget 2024 abolishes the Angel tax. Such a move is likely to create a more supportive environment for private equity investments, aligning with the government's focus on providing tax certainty. Draconian Angel Tax saw a sparked debate last year, specifically for non-resident and private equity investors looking to invest in India. Angel tax is an anti-abuse provision wherein Indian closely held companies were subject to tax on the excess of the issue price received over the fair market value of the shares."
Priyanka Duggal , Partner, Tax, Grant Thornton
"Until last year, Indian closely held companies were subject to Angel Tax only on shares issued to resident investors, however Budget 2023 introduced the same for shares issued to non-residents as well followed by specific guidance and rules on computation mechanisms. Since then, foreign Private equity investors have been facing double whammy for compliance with angel tax and foreign exchange regulations. While certain exemptions were provided on the levy including those for specified funds, start-ups, etc, angel tax did place a significant burden on Indian corporates looking to attract investments as well as need for structuring the investments owing to multiple uncertainties. Notably, FDI and PE/VC inflows in India saw a mild decline last year and hence sun-set clause for angel tax provisions are likely to support boosting investor confidence."
Vishal Agarwal , Partner, Tax, Grant Thornton Bharat
"The Budget provides ample opportunities for private equity investors. Notable decrease in reassessment period to 5 years and the elimination of angel tax are two significant benefits. While there is concern over the rise in tax rates on capital gains and the absence of a clear plan to remove TCS, there may be some disappointment. Nevertheless, the move to simplify FDI policy and regulations, specifically to encourage foreign investments, shows promise. Moreover, there are various measures aimed at stimulating domestic demand through employment schemes and cash transfers, which are anticipated to result in enhanced economic growth and create a positive investment atmosphere."
Vishal Agarwal , Partner, Tax, Grant Thornton Bharat
"Variable capital companies as new vehicles for establishing funds in India could enhance planning, streamline structures, and improve understanding of legal implications. This development reflects the growing maturity of the fund management industry in India."
Ramendra Verma , Partner and Government Ecosystem Leader, Grant Thornton Bharat
"The budget's emphasis on the industrial ecosystem, including expanding industrial clusters, promoting skills and internships, increasing SIDBI branches, and facilitating rental housing and dormitories through PPPs, is commendable. To achieve the desired impact, a convergent approach is essential. Aligning these efforts will drive sustainable growth, enhance employment opportunities, and strengthen the MSME sector in India."
Ramendra Verma , Partner and Government Ecosystem Leader, Grant Thornton Bharat
"The inclusion of Viability Gap Funding (VGF) in infrastructure development is a crucial step. While great progress has been observed in the development of roads, careful planning and execution of other projects are essential. With a strategic approach, these projects can drive significant economic growth."
Ramendra Verma , Partner and Government Ecosystem Leader, Grant Thornton Bharat
"The Employment Linked Initiative appears to be a significant step towards fostering job opportunities in the formal sector. Linking employment to specific initiatives will create a positive impact on the workforce."
Riaz Thingna , Partner, Tax, Grant Thornton Bharat
"The withdrawal of the 2% equalization levy was a surprising move as there is no immediate action on the part of the government to introduce domestic legislation on pillar one. Many businesses expected the government to introduce domestic legislation required under the proposed global tax deal."
Rishi Shah , Rishi Shah, Partner, Grant Thornton Bharat
"Following sound macroeconomic principles, the government has revised its fiscal deficit target from 5.1% of GDP announced the Interim Budget to 4.9% in today’s final announcement. This proactive measure aims to reduce the excess expenditure incurred in response to the pandemic. This move will enhance confidence among global investors and is expected to further stimulate fund inflows, particularly in the fixed income markets."
Saket Mehra , Partner and Auto & EV Industry Leader, Grant Thornton Bharat
"The abolishing of angel tax is expected to encourage more investors to support emerging EV technologies, fostering a robust ecosystem for sustainable transportation solutions. This will accelerate the development of green mobility solutions and boost the EV startup ecosystem. With over 60 Indian EV startups focusing on sustainable mobility, energy infrastructure, commercial mobility, and battery management systems, this development will further enhance growth. The overall PE investments in the Auto & EV industry in the first half of 2024 reached USD 628 million, highlighting the sector's strong investment appeal. The announcement will also positively impact the FMCG and logistics sectors, closely supported by the EV industry."
Sridhar V , Partner, Deals Consulting, Grant Thornton Bharat
"Accelerating EV adoption will be an important agenda through FAME III and Budget 2024. We observed good traction in the e2w segment with the sales crossing a million units while FAME II was on and the government should look at furthering the attention to e2w, since it contributes to the largest volume of sales of vehicles in India and EV volumes have been down since the slashing of subsidy and end of FAME II. The incentive to Government or State owned corporation-owned buses should be extended to Privately owned buses also as they significantly help in intercity commute and are used favourably by the passengers. Passenger cars have been outside of the FAME program and the expectation is there to have this segment covered albeit with a cap on the cost of the vehicle. One should also add to say that all this without support for investments in Infra for EV like charging stations and battery technology may not mean much. There has been a fair amount of shift in consumer interest to EV and one expects the current government to continue with their goal to achieving green mobility."
Shabala Shinde , Partner and Real Estate & REITs Industry Leader, Grant Thornton Bharat
The 'look east' announcements for development of infrastructure in areas such as expressways, industrial corridors, water, and power are anticipated to promote balanced regional development. Incentives for capital investments in eastern cities will encourage private sector involvement.
Shabala Shinde , Partner and Real Estate & REITs Industry Leader, Grant Thornton Bharat
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The government’s initiative to build working hostels and crèches to support women’s employment is a significant step towards a more inclusive workforce. This policy will drive demand for mixed-use and community-centric real estate projects. Integrating these facilities within residential and commercial complexes will empower women, boost labour force participation, and foster economic growth.
Shabala Shinde , Partner and Real Estate & REITs Industry Leader, Grant Thornton Bharat
"The Indian real estate sector is growing rapidly, projected to reach USD 1 trillion by 2030, driven by urbanisation, population growth, government initiatives, and the rise of asset tokenisation. Challenges include regulatory hurdles and financial strain. The REIT market, though nascent, is expanding with regulatory support and stable income prospects. Key trends include a shift towards organised players, focus on affordable housing, technological adoption, sustainable development, and tokenisation of real-world assets enhancing liquidity and investment access."
Sohrab Bararia , Partner, Tax, Grant Thornton Bharat
Reviewing existing customs duty rates and furthering exemptions or reductions of BCD across various sectors underscores the government's vision for 'Make in India.' Sectors like leather, critical minerals, and telecom (mobile phones) will benefit from duty exemptions or reductions, highlighting the need for growth and penetration in these areas.
Vivek Ramji Iyer , Partner and Financial Services Ecosystem Leader, Grant Thornton Bharat
The Union Budget 2024 proposes market-based financing for private sector involvement in infrastructure projects. This is expected to attract new entrants into the NBFC-IFC space and lead to increased deal activity over the next 18-24 months.
Vivek Ramji Iyer , Partner and Financial Services Ecosystem Leader, Grant Thornton Bharat
Simplifying FDI rules and focusing on using the rupee as the investment currency indicates the government’s aim to mitigate exchange rate risks and minimise foreign exchange volatility.
Vivek Ramji Iyer , Partner and Financial Services Ecosystem Leader, Grant Thornton Bharat
"Digital Public Infrastructure in agriculture will provide more farmer data, enabling fintechs to access mainstream credit information. This will improve credit quality and increase financial inclusion for farmers."
Vivek Ramji Iyer , Partner and Financial Services Ecosystem Leader, Grant Thornton Bharat
"Regulatory forbearance will allow banks to extend credit to stressed MSMEs in the Special Mention Account (SMA) category, where vulnerabilities are caused due to factors beyond the control of MSMEs. Enhanced regulatory focus will ensure benefits reach deserving entities."
Vivek Ramji Iyer , Partner and Financial Services Ecosystem Leader, Grant Thornton Bharat
"The government has broadened the market for receivables discounting for MSMEs by lowering the threshold for more receivable buyers on the Trade Receivables Discounting System (TREDS) platform. Enhanced liquidity will help MSMEs manage their working capital better, enabling them to fund their growth aspirations."
Vivek Ramji Iyer , Partner and Financial Services Ecosystem Leader, Grant Thornton Bharat
Public Sector Banks will develop independent credit scoring models based on MSMEs' digital footprint, leading to improved data quality and governance. We also expect increased regulatory scrutiny of these alternate credit scoring models.
Pre-Budget expectations:
Akhil Chandna , Partner, Tax, Grant Thornton Bharat
"Factors such as holding periods for different classes of assets, different income tax and surcharge rates depending upon the type of assets, income level of the taxpayers, etc., have added to the complexity of the entire capital gains calculation for the common man. This has resulted in an outstanding expectation to ease the capital gains taxation and align the holding period across asset classes, different income tax rates, and surcharges for different asset classes."
Akhil Chandna , Partner, Tax, Grant Thornton Bharat
"With the introduction of the standard deduction in 2018 and the last increase in 2019 from ? 40,000 to ? 50,000, it is essential to raise the threshold to ?75,000 now to align with current living costs and inflation. Raising the standard deduction can help improve people's purchasing power, especially those with fixed incomes like pensions."
Akhil Chandna , Partner, Tax, Grant Thornton Bharat
"There is a possibility that the government may increase the standard deduction. Currently, with a significant increase in inflation and the standard deduction remaining fixed at Rs 50,000 from an extended period, individuals are anticipating an increase in the standard deduction to Rs 1,00,000, which would provide some relief to the taxpayers."
Akhil Chandna , Partner, Tax, Grant Thornton Bharat
"We are expecting reasonable deductions under the new tax regime i.e., health insurance premiums, life insurance premiums, home loan interest. We also expect an increase in deduction limits under Section 24 of the Income-tax Act, 1962 for interest paid on home loans from the existing Rs 2 lakh to Rs 3 lakh."
Bhanu Prakash Kalmath S J , Partner and Healthcare Services Industry Leader, Grant Thornton Bharat
"We hope for a substantial increase in the overall health budget to reach at least 3 percent of GDP to address existing gaps comprehensively. Strengthening rural healthcare infrastructure and expanding the reach and coverage of Ayushman Bharat, would be a significant step towards further bringing down the out-of-pocket medical expenditure and ensuring Universal Health Coverage."
Bhanu Prakash Kalmath S J , Partner and Healthcare Services Industry Leader, Grant Thornton Bharat
"India’s domestic pharmaceutical market, valued at over $50 billion and growing at 8-10 per cent annually, is a global health powerhouse, supplying medications to over 200 countries. Rising private investments, strong M&A, and PE activity, particularly in biosimilars, CDMOs, and API businesses, reflect a positive outlook for the sector. To solidify this position and ensure future growth, the industry looks to the upcoming budget with high expectations."
Dr Dhaval Sheth , Partner, Public Sector Consulting (PSC), Grant Thornton Bharat?
"The Budget should allocate funds for administrative reforms aimed at reducing bureaucratic inefficiencies. Implementing e-governance solutions and simplifying procedures can make public services more accessible and user-friendly. For example, introducing a single-window clearance system for business permits can streamline the process, encouraging entrepreneurship and boosting economic growth."
Naveen Malpani , Partner, FMCG & Consumer Goods Industry Leader, Grant Thornton Bharat
"A greater capital push in welfare schemes could enhance purchasing power in rural markets, benefiting the FMCG industry."
Priyanka Duggal , Partner, Tax, Grant Thornton Bharat
"The consumer industry is hopeful for rationalisation of the provisions of accelerated tax incentives for employment generation, simplified tax structures as well as adding incentives for the startups looking at reverse flip to Indian holding companies, retail-centric initiatives for digitisation simplifying the equalisation levy, TDS and TCS provisions. From a direct tax perspective, the interim Budget 2024 seems to have missed extending the concessional tax rate of 15 per cent for new manufacturing companies. Reflecting at the importance and impending growth of the sector, a clear ask from the Budget will be to reinstate the same. With technology and AI becoming critical for retail and ecommerce companies, the need of the hour is promoting digitisation for businesses and introducing accelerated tax breaks on digitisation expenditures."
Shabala Shinde , Partner and Real Estate & REITs Industry Leader, Grant Thornton Bharat
"The Indian real estate sector is growing rapidly, projected to reach USD 1 trillion by 2030, driven by urbanisation, population growth, government initiatives, and the rise of asset tokenisation. Challenges include regulatory hurdles and financial strain. The REIT market, though nascent, is expanding with regulatory support and stable income prospects. Key trends include a shift towards organised players, focus on affordable housing, technological adoption, sustainable development, and tokenisation of real-world assets enhancing liquidity and investment access."
Ramendra Verma , Partner and Leader, Public Sector Consulting, Grant Thornton Bharat
"If the government could come up with ways to generate jobs by tweaking a PLI scheme for MSMEs, SHGs and JLGs, it can help India in countering Chinese imports."
Sridhar V , Partner, Deals Consulting, Grant Thornton Bharat
"We observed good traction in the E2W segment with the sales crossing million units while FAME II was on and the government should look at furthering the attention to E2W, since it contributes to the largest volume of sales of vehicles in India and EV volumes have been down since the slashing of subsidy and end of FAME II."
Sridhar V , Partner, Deals Consulting, Grant Thornton Bharat
"Passenger cars have been outside of the FAME programme and the expectation is there to have this segment covered albeit with a cap on the cost of the vehicle. One should also add to say that all this without support for investments in Infra for EV like charging stations and battery technology may not mean much. There has been a fair amount of shift in consumer interest to EV and one expects the current government to continue with their goal to achieving green mobility"
Shabala Shinde , Partner and Real Estate & REITs Industry Leader, Grant Thornton Bharat
"Incorporating IREDA and HUDCO under Section 54EC of the Income Tax Act will enable them to issue bonds eligible for capital gains tax exemptions. This inclusion can attract more investments, lowering their funding costs. As investors pursue these bonds for tax benefits, IREDA and HUDCO will strengthen their financial capacity to support renewable energy projects and urban development. This aligns with the government's strategy for Amrit Kaal and its broader goals of promoting sustainable infrastructure and economic growth."
Tejinder Gupta , Partner and Tourism & Hospitality Industry Leader, Grant Thornton Bharat
"Extended industry status to the hospitality industry along with enabling provision of affordable-rate infrastructure funds for the private sector would go a long way for large scale developments."
Vivek Ramji Iyer , Partner and Financial Services Ecosystem Leader, Grant Thornton Bharat
"Expect the Budget to focus on creating access to new asset classes from a mutual funds perspective in real estate and infrastructure."
Vivek Ramji Iyer , Partner and Financial Services Ecosystem Leader, Grant Thornton Bharat
"It would be good to see some announcements on the capital gains side but we expect it to be in the next budget rather than this year’s budget, given the need to stay the course on the fiscal consolidation path."
Vivek Ramji Iyer , Partner and Financial Services Ecosystem Leader, Grant Thornton Bharat
"While initiatives around green deposit and green lending have been underway, it would be important for the government to focus on transition finance, which is the key requirement to move away from traditional carbon-intensive energy frameworks to low carbon footprint frameworks."
Vivek Ramji Iyer , Partner and Financial Services Ecosystem Leader, Grant Thornton Bharat
"Given that India is a banking led economy, initiatives around liberalisation of foreign direct investment, rationalisation of foreign bank tax rates amongst others will help boost capital flows in the country, which will further accelerate the goals towards Amrit Kaal that the government set out for India."
Vivek Ramji Iyer , Partner and Financial Services Ecosystem Leader, Grant Thornton Bharat
"There is still room for consolidation with the public sector banks to bring about greater efficiencies. This will also help us create large banks from an India standpoint, that can look at playing a larger role at a global level. We cannot build global supranational banks from India without consolidation."