Budget: Government’s big push on infra, innovation and technology to spur growth

The interim budget 2024 aimed to strengthen the building blocks for a developed Indian economy by 2047. From infrastructure and technological development, the budget looks to aid growth, provide long-term financing and strengthen Make in India.
For business and industry, there were some significant announcements and it is clear the emphasis now is on ‘innovation being the foundation of development.’ Here are some reactions from entrepreneurs and business leaders.
Karthik Reddy, Founder & Managing Partner, Blume Ventures & Chairperson, IVCA
It is commendable to find the interim budget with its right intensions of fortifying the financial sector to meet the growing investment needs of our nation. The extension of tax-exemption for startup and sovereign wealth funds until March 2025 is a welcome move, fostering a conducive environment for entrepreneurial growth. Moreover, the emphasis on deep-tech investments, particularly in the defense sector, aligns with our vision for innovation and technological advancement.The budget’s commitment to supporting R&D and innovation in India with the announcement of a 1-lakh-crore corpus for long-term financing in sunrise sectors and a holistic scheme for the biopharmaceuticals sector demonstrates a proactive stance towards fostering sustainable growth. Overall, these measures reflect a comprehensive strategy that will undoubtedly stimulate economic development and propel India towards becoming a global economic powerhouse.

Uttam Tibrewal, Executive Director, AU Small Finance Bank

The interim union budget for FY 2025 reflects the government’s strategic commitment to growth and all-round development while maintaining positive guidance towards fiscal consolidation. The Finance Minister reinforced support towards rural housing, start-ups and digitization which should augur well for robust credit demand. The budget pegged FY’25 fiscal deficit target at 5.1% while reducing the FY’24 target from 5.9% to 5.8%. The budget also aims to push capital spending higher to 3.4% of GDP at Rs 11.1 lakh crore in FY’25. This accompanied by lower gross borrowing of Rs 14.13 trillion should support the interest rate environment and enable room for increased private capex for growth. Overall, the interim budget displays policy continuity while maintaining a fine balance between fiscal prudence and growth.
Siddarth Pai, Founder & Partner, 3OneFour, Capital
The vote on account remained so as the Finance Minister reiterated the strides made by their policies over many years with a commitment to do more. An interesting phrase used in the speech was “focus on the outcome, not the outlay “. The government has made tremendous strides in increasing market sizes and capacity across many areas. A review of the existing frameworks was announced last year and this will no doubt inform the policy of the incoming administration. The emphasis on growth will underscore the review and rewrite. The greatest capacity unlocking will happen through increasing access.

New funds such as the one lakh corpus is awaited. This will spur investment and commercialization of research and increase productivity.

This was a reflection of past achievements. The upcoming manifesto season will highlight how all parties view capital formation, new asset creation & innovation.

Rajat Tandon, President, IVCA

The Finance Minister’s interim budget reflects a forward-thinking approach, upholding the nation’s investment needs. The emphasis on preparing the financial sector through regulatory changes and capacity upgrades aligns with IVCA’s vision for a robust domestic pool of capital. The extension of tax exemptions for start-up and sovereign wealth funds until March 2025 is a positive step, fostering an environment conducive to innovation. Furthermore, the proposal of a 1-lakh-crore corpus for long-term financing in sunrise sectors, coupled with a new scheme boosting deep-tech investments, especially in defence, signals a commitment to catalysing growth in strategic areas. These measures hold promise for a resilient and progressive economic landscape.

Rajinish Menon, CEO and Founder, Sukino Healthcare Solutions

I appreciate the government’s comprehensive and inclusive approach to development, as outlined in the Union Budget. The increased attention on the healthcare sector, along with the extension of the Ayushman Bharat coverage to Anganwadi and ASHA workers, shows a dedicated effort to build a healthier nation. The plan to establish more medical colleges by using existing hospital infrastructure is a forward-thinking move that will strengthen our healthcare system. The formation of a committee to examine this matter demonstrates a careful approach to optimising resources.

Moreover, the government’s commitment to promoting cervical cancer vaccination for girls aged 9-14 years is a crucial step towards prioritising preventive healthcare. This proactive measure aligns with the government’s dedication to the well-being of its citizens.

As we enter the next five years, we are optimistic about unprecedented development in the healthcare sector. We as an industry look forward to collaborating with the government to ensure the effective implementation of these visionary initiatives.”

Ashish Kukreja, Founder and CEO,

Nirmala Sitharaman‘s sixth straight budget is expected to propel India’s growth rate above 7% this year. The government’s top-most priority is to uplift the poor, women, youth (Amrit Pidhi), and farmers.

Real estate, a key sector, will witness a significant boost with the announcement of 2 crore more houses to be built under PMAY Gramin in the next five years. Deserving sections of the middle class living in rented houses, or slums, or chawls and unauthorised colonies will benefit from the government’s new scheme to assist them with purchasing and constructing their own homes. The sector will further receive a fillip with an increased allocation of 25% YoY higher on roads and the government’s emphasis on crucial infrastructure segments such as railways, metros, power, and capital goods.

The budget sets an ambitious fiscal deficit target of 5.1% and assumed nominal GDP growth of 10.5% for FY25, which sets the tone for Viksit Bharat. Today’s budget depicted how PM Narendra Modi looks at the Indian economy – modern, innovative, developed, and green.

The comprehensive union budget will be unveiled post-elections and is scheduled for April-May. Typically, the interim budget refrains from making significant and far-reaching policy declarations. Looking forward to the actual Budget in July.

Rampraveen Swaminathan, Managing Director and CEO of Mahindra Logistics Ltd

The Union Budget 2024’s pivotal focus on infrastructure development, aligns seamlessly with our vision for enhanced logistics efficiency. The government’s commendable commitment to supporting EV manufacturing and charging infrastructure is a significant stride towards sustainable mobility. We appreciate and commend the government’s efforts towards Green Energy, aligned with the Nation’s commitment for ‘net-zero’ by 2070.

The announcement of three major economic railway corridor programs, spanning energy, mineral, and cement corridors, port connectivity corridors, and high-traffic density corridors under the PM Gati Shakti initiative, is poised to be transformative. These corridors not only promise to decongest high-traffic areas but also elevate the safety and speed of passenger trains. The integration of dedicated freight corridors is poised to catalyse GDP growth and significantly reduce logistics costs.

With an increased outlay in FY25 and the expedited development of various infrastructure projects, the government’s proactive approach is set to spur economic growth. The India Middle East Europe Economic Corridor announcement is particularly game-changing, strategically positioning India on the global trade map.

Kami Viswanathan, President, MEISA, FedEx Express

The 2024 interim budget’s increased capital expenditure for infrastructure development is a strategic and commendable move. It promises to accelerate economic growth and positively impact the logistics sector. The emphasis on expanding air connectivity, along with the development of existing airports and the establishment of new ones, is a pivotal step that aligns with our advocacy for efficient multimodal logistics.

The government’s commitment to the PM Gati Shakti National Master Plan, is encouraging. These initiatives aim to enhance logistics efficiency and reduce costs, aligning with our objectives of service excellence and innovation in logistics. Additionally, the ‘Amrit Kaal’ initiative, which focuses on empowering MSMEs and boosting their global competitiveness, is set to benefit the broader logistics sector.

FedEx welcomes the forward-looking approach of the 2024 interim budget, reflective of the ‘Viksit Bharat’ vision. We remain committed to actively contributing to India’s growth journey, aligning our efforts with the government’s vision for a smarter and more sustainable logistics infrastructure in India.