Union Budget of July 2024: A Catalyst for Growth in Startups, Entrepreneurship, Manufacturing, and the Pharma Industry

Prime Minister Narendra Modi once remarked, “Development is not about factories, dams, and roads. Development is about people. The goal is material, cultural and spiritual fulfilment for the people. The human factor is of supreme value in development.”

As someone deeply invested in the growth and development of India’s economic landscape, I, Manjula Subhash Nair, am excited to share my insights on the Union Budget of July 2024.

India, often hailed as the world’s next big economic powerhouse, continues to solidify its position as a global hub for startups, entrepreneurs, and the manufacturing industry. With its vast and youthful population, robust technological infrastructure, and a government keen on fostering innovation, India is poised to leap into an era of unprecedented growth.?

In this blog we explore the interesting facts about the Union Budget with a focus on startups, Entrepreneurship, Manufacturing the Pharma Industry.

Startups

The Union Budget of July 2024 brings a refreshing wave of optimism for the startup ecosystem in India. Recognizing the pivotal role startups play in economic growth and job creation, the government has introduced a slew of measures to ease regulatory burdens and enhance access to capital.

The establishment of a new Startup Fund with an allocation of ?10,000 crore aims to provide early-stage funding to innovative ventures. Additionally, tax incentives for startups have been extended, and compliance requirements have been simplified, making it easier for new businesses to thrive. To bolster the start-up eco system the Government has proposed to abolish the angel tax on all the asset classes.

The Tax Deduction at Source (TDS) on e-commerce transactions has been reduced from 1% to 0.1%. According to Section 194-O of the Income Tax Act, e-commerce operators are required to deduct income tax from the gross amount of the sale of goods or provision of services, or both, facilitated through their digital or electronic platforms.

There is provision of Development of Population Scale Digital Public Infrastructure tools by the Private sector in domains of e-commerce, health, law, MSME service delivery and urban governance.

Entrepreneurship

Entrepreneurship, the backbone of innovation and economic dynamism, receives a significant boost in this year’s budget. The government has announced the creation of Entrepreneurial Development Centers (EDCs) across major cities, providing mentorship, resources, and networking opportunities to budding entrepreneurs. These centers are set to become the breeding ground for the next generation of Indian business leaders.

Furthermore, initiatives like the “Skill India 2.0” program will focus on enhancing entrepreneurial skills among the youth, ensuring they are well-equipped to navigate the challenges of the business world.

The July Budget 2024 also tackled the issue of low women participation in India's entrepreneurial landscape, highlighting significant barriers. Despite India having the world’s third-largest startup ecosystem, women-led startups received only 15% of the overall startup funding from 2020 to 2022, as per a Tracxn report.

Systemic biases and perception challenges often hinder women entrepreneurs from securing financing. Unconscious prejudices among investors and the lack of female representation in funding institutions further exacerbate the situation. It is also estimated in the Budget that by 2030 more than 30 million women-led businesses will create around 170 million jobs that could potentially reshape the environment.

Manufacturing

The manufacturing sector, crucial for India’s economic resurgence, has been given a strong impetus in the 2024 budget. With the aim of making India a global manufacturing hub, the government has rolled out the “Make in India 2.0” initiative. This program includes substantial investments in infrastructure development, including the construction of new industrial corridors and the modernization of existing ones.

The Production Linked Incentive scheme is the mainstay of the Government to boost the manufacturing sector. A significant proportion of allocation has been made to improve transportation networks, power supply and the digital infrastructure.

The budget introduces several tax reforms designed to alleviate the burden on manufacturers. This includes the rationalization of customs duties on raw materials and intermediaries, which will lower production costs. Additionally, the implementation of a simplified tax compliance regime is anticipated to streamline operations and support business expansion.

Pharma Industry

The pharmaceutical industry, one of India’s most vital sectors, has also garnered substantial attention in the budget. Recognizing the critical role of the pharma industry in ensuring public health and its potential for economic growth, the government has allocated ?20,000 crore for research and development in pharmaceuticals and biotechnology.

This funding aims to position India as a leader in drug discovery and innovation. Moreover, initiatives to streamline drug approval processes and enhance the regulatory framework will ensure that Indian pharma companies can compete effectively on the global stage.

In conclusion, the Union Budget of July 2024 presents a comprehensive and forward-looking approach to fostering growth in the sectors of startups, entrepreneurship, manufacturing, and the pharmaceutical industry. By introducing strategic measures and substantial financial allocations, the government has demonstrated its commitment to driving economic progress and innovation.

These initiatives are poised to unleash a wave of entrepreneurial activity, enhance India's manufacturing capabilities, and position the nation as a global leader in pharmaceuticals. As I see it, this budget marks a significant step towards realizing India's potential as the next big economic powerhouse.