Budget will benefit middle class, poor, farmers, MSMEs and women entrepreneurs

MVIRDC World Trade Center Mumbai compliments the Hon’ble Union Finance Minister for announcing a path breaking budget which will spur further economic growth despite the global challenges.

Welcoming the budget, Dr. Vijay Kalantri, Chairman, MVIRDC WTC Mumbai remarked, “This is a futuristic budget that will promote responsible growth by giving thrust on clean energy, circular economy, natural farming and it is aligned with our global commitment to reduce carbon intensity of GDP growth. The budget has ticked all the boxes by providing relief to MSMEs, individual tax payers, farmers and women self help groups.”

The G20 Presidency has given a unique opportunity to India to strengthen its role in the world economic order. The Indian Government is steering an ambitious, people-centric agenda to address global challenges, and to facilitate sustainable economic development.

The huge impetus to the Capital expenditure for the third year in a row itself is indicative of the fact that it is the Government’s intention to increase employment opportunities in the country and achieve economic growth as well. The government has increased capital expenditure for FY24 by 33% to Rs 10 lakh crore, which is 3.30% of GDP.

Honouring the principles of co-operative federalism, the Central Government has decided to continue with the 50-year interest free loan to the state governments for one more year to spur investment in infrastructure and to incentivize them for complementary policy actions. This will ensure that there is a balanced growth in every state in the country.

The newly established Infrastructure Finance Secretariat will be assisting all the stakeholders for more private investment in infrastructure, including railways, roads, urban infrastructure and power, which are predominantly dependent on public resources. This is a great example of PPP model where the larger interest of the general public is given utmost importance.

On the income tax front, there is relief for every stakeholder starting from pensioners to high net worth individuals (HNIs). The rejig of the personal income tax slabs will reduce the income tax burden and render more resources in the hands of the individuals thereby either increasing savings or consumption leading to robust tax collections.

The rationalization of Customs duty rates is a welcome move which will help more investments in Make in India initiatives. The relief provided to the MSMEs through the two Vivad se Vishwas Schemes will result in reducing the financial and contractual burden.

The Budget proposals also aim at enhancing ease of doing business. More than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalized. Introduction of Jan Vishwas Bill to amend 42 Central Acts will go a long way to build the trust and will truly unleash the potential of the Indian Economy. Using PAN as the Common Business Identifier for digital systems is a welcome step.

Policy Suggestions

While welcoming the enhanced corpus under credit guarantee scheme for MSMEs, Dr. Kalantri suggested that this scheme should be implemented effectively to reduce rejection rate of applications by MSME borrowers for collateral-free loans.

The Government should now rationalize the GST rate structure and reduce the number of rates as done for Customs duty. Also, the negotiations for pending FTAs need to be concluded at the earliest to boost exports further, Dr. Kalantri suggested.

“We also suggest the government to extend the exemption period for availing concessional Corporate Tax rate for new manufacturing investment to March 2025 as companies generally take more time to plan and execute their new investment plan in this uncertain global environment,” he added.

Further, in order to encourage shifting of global supply chain towards India, the government may introduce production linked incentive schemes in plastics, engineering goods, leather and other labour intensive goods.