A Budget that Focuses on Job Creation
The standout feature of the Union Budget 2024-25 was its focus on speeding up fiscal consolidation with the Fiscal Deficit being revised down 20 bps from the Interim Budget to 4.9%. While Finance Minister Nirmala Sitharaman rolled out a string of measures for job creation, rural development, women empowerment and infrastructure investment, the announcement on Capital Gains tax seems to have come as a big dampener for the market.
Increased allocation in the budget towards Education, Skilling and Employment and special employment-linked incentive schemes for employees and employers aptly demonstrated the government mindset to significantly improve employment and employability in the country. These steps will go a long way in driving consumerism. The support for higher education loans and the push for women in the workforce are other big pluses.
The government has increased standard deductions from Rs. 50,000 to Rs. 75,000, revised tax rates under New Tax Regime and slab revisions would result in savings of around Rs. 17,500 in net taxes in the hands of individual. This would mean more disposable income in the hands of consumers and would lead to sustained demand for branded consumer goods.
The Budget’s push on urban and rural growth will help boost rural consumption and also increase discretionary spending. Urban Housing needs of 1 crore urban poor and middle-class families are being addressed with an investment of Rs. 10 lakh crore. The government’s decision to allocate Rs. 2.66 lakh crore for rural development, including rural infrastructure, and its continued focus on rural infrastructure development are big steps in the right direction. These measures would further boost consumer sentiments in the hinterland, which is already showing green shoots of revival.
- Mohit Malhotra, Chief Executive Officer, Dabur India Limited
Measures Will Stimulate Consumption Growth
The government has tried to strike a balance between populist and policy measures. RAI appreciates the government’s focus on empowering the middle class and rural population. Initiatives such as monetary support for farmers, higher exemption limits in personal income tax, and increased standard deductions will provide higher disposable income, leading to increased spending. We believe this will stimulate consumption growth, thereby boosting the overall economy. The reduction of duty on gold, precious metals, and mobile phones will also provide a significant boost to these sectors, particularly during the festive season.
The government’s commitment to skilling and employment support, including initiatives for youth employment and skilling programs, is another commendable aspect of the budget, ensuring a future-ready workforce in the retail sector.
The budget’s emphasis on MSMEs and startups, including enabling more lending and abolishing the angel tax, is a positive step towards realizing their potential. Tax simplification and compliance, which are crucial needs of the hour, have also been addressed. Additionally, the Employment Linked Incentive, offering reimbursement to employers up to Rs. 3,000 per month for two years towards their EPFO contribution for each additional employee, is a welcome move.
The establishment of working women’s hostels and creches in collaboration with the industry is an essential measure for supporting women working in the retail sector. The focus on developing infrastructure for shopping in urban development is a significant step forward.”
- Kumar Rajagopalan, CEO, Retailers Association of India (RAI)
Agri and Farmer-Centric Budget
The biggest takeaway from the Union Budget 2024–25 for the agriculture sector is its focus on enhancing agricultural research and productivity. The budget’s farmer-centric initiatives underscore a strong commitment to accelerating positive growth in India’s agrarian economy. Furthermore, the emphasis on inclusive development, innovation, and next-generation reforms align perfectly with our industry’s goals of fostering a sustainable ecosystem. These initiatives will not only enhance productivity but also support farmers’ livelihoods and drive significant growth in the sector. Additionally, I am extremely pleased with the abolition of the angel tax for startups. It not only encourages resilient entrepreneurship but will also strengthen the startup ecosystem, fostering innovation across India.
– Gaurav Manchanda, Founder & MD, The Organic World, India’s largest organic and natural retail store
Promising Measures for India’s Start-up Ecosystem
The Union budget introduces promising measures for the startup ecosystem, including the removal of the angel tax, which had earlier posed challenges for emerging businesses. As an early-stage startup founder, this change can be transformative by enabling angel investments, enhancing capacities to innovate, attract talent, and scale our vision, fostering a vibrant startup ecosystem where bold ideas can flourish and contribute to the economy.
The government has taken another impactful step to strengthen data governance through the Digital India Mission, which emphasizes the collection, processing, and management of data leveraging advanced technology tools. This strategy promises to benefit many industries and open new avenues for data management. By leveraging these technologies, the food discovery segment for instance, has already witnessed significant traction, particularly in personalizing experiences using data. We are now confident that we will see greater impact in the near future.
Overall, we anticipate that these measures will create a more supportive environment for startups and contribute to a dynamic and thriving business landscape.
- Jugul Thachery, Founder & CEO, HOGR
