As India heads for the Union Budget 2024, the agriculture, manufacturing, and MSME sectors stand at milestones of growth. Indian businesses across all industries are abuzz with expectations for monetary allocations, special incentives, and continuation of the existing Government policies.
The upcoming budget may focus on populist policies, providing incentives to spur investments in the country and addressing the expectations of a diverse range of stakeholders to boost economic growth and stimulate broader economic participation.
Which Sectors Will Be In Focus in Union Budget 2024?
I. Manufacturing Sector
Manufacturing is one of the most important sectors in India. It plays a major role in economic development and employment creation throughout the country. Over the past few years, the Govt of India has introduced various initiatives and schemes such as Make in India, and Production Linked Incentives (PLI). Expect more proactive measures to increase India’s manufacturing capacity, and a special focus on aluminum, steel, battery, and lithium cells. It is yet to be seen whether the Govt will rationalize the provisions of the Customs Duty to boost domestic manufacturing.
II. Agriculture Sector
India is among the most populated countries in the world with a population of over 1.45 Billion. As the agriculture sector plays a critical role in the country’s food security, there are likely major announcements to combat agriculture shortage and control food price inflation amid patchy rains, uncertain weather, and other natural challenges. The Government may also extend the scope of the Production Linked Incentive (PLI) scheme and provide funding to adopt cutting-edge technology in the agro sector.
III. MSME
The Micro, Small, and Medium Enterprises (MSMEs) employ over 62% of Indians as of 2024. However, as less as 10% of the workers are provided with proper training. This figure is in contrast to sixty percent in the developed regions of the world. Expect more funding for the MSMEs to conduct employee training programs and adopt digitization & automation. The Government will likely continue supporting the Emergency Credit Line Guarantee Scheme and Partial Credit Guarantee Scheme to strengthen the MSME industry.
Also Read : Union Budget 2024 : What Can Be Expected for Medical Devices Manufacturing in India
IV. Renewable Energy Sector
It’s expected that the Government may give a big push toward solar and renewable energy projects, increasing the investment in grid infrastructure, and strategic measures to change consumption patterns. Experts have long demanded tax deductions for individuals and businesses that adopt energy-efficient devices. The Govt may likely promote startups focused on innovation & technology to increase the storage capacity at the grid’s level and develop next-gen energy solutions. There may be other provisions such as special incentives to fulfill the Government’s aspirations to make India a leader in solar manufacturing.
V. Education Sector
The education sector is the bedrock of the country’s social, cultural, and economic development. The Government of India has already announced the National Education Policy 2020 which is aimed at restructuring the educational system in India and making education universally accessible. The Union Budget 2024 may invite the participation of the private sector, encourage further investment, and boost capital distribution.
VI. Real Estate Sector
Housing and infrastructure projects are an integral part of India’s real estate sector. The real estate sector has shown exceptional persistence during the global economic slowdown. Even today, it contributes to employment creation, and economic growth amid rising input costs. Expect revised GST input tax credits, and increased spending through Pradhan Mantri Awas Yojana (PMAY Scheme) to fulfill the Prime Minister’s dream of building 20 Million houses in rural India over the next five years period. Likely, the Government may also consider a separate tax deduction limit.
VII. FMCG Sector
The FMCG sector has a lot of expectations from the Government such as improving the existing agriculture infrastructure and generating new job opportunities in the rural regions, among others. The upcoming budget may strive to lower import dependency in the FMCG sector and build an Atmanirbhar Bharat (Self-reliant India) through budgetary allocations, and promotion of domestic manufacturing in India. The Government may take strategic measures to increase the disposable income of the Indian citizens.
VIII. Aerospace Industry
The path to making India an aerospace leader passes through innovation, ease of doing business, and infrastructure development. Experts in the aerospace industry have long been calling for stable and supportive policies from the Government to make India a preferred destination for aerospace manufacturing. We may witness increased funding for Research & Development in the aerospace industry in the upcoming budget.
Summing Up
Over the past few years, the Government’s priority has been to build better nationwide infrastructure, enhance the ease of doing business, and make structural reforms to build an investment-conductive environment. Such decisive steps are pivotal in its quest to make India a self-reliant economy and a global manufacturing hub.
In the upcoming Union Budget 2024, we may witness substantial steps and ambitious reforms that can shape the future of the Indian economy, create a booming ecosystem, and build a roadmap for India’s success.
