Despite global growth prospects remaining subdued, India is expected to register 7% growth in FY24 led by domestic demand. The GoI will have the task of sustaining medium-term growth i.e., restoring fiscal consolidation while prioritizing capital expenditure in FY24-25.
86% of CEOs believe India’s economic growth will improve over the next 12 months: PwC’s Annual Global CEO Survey – India perspective.
Even though, typically, in the year of ensuing elections, the party in power cannot role out any tax sops, which may have the effect of influencing the voters in favor of the party in power in terms of Election Commission Model Code of Conduct, we can see some proposals that may have positive impact on Industrial and Infrastructure growth.
Following is expected from the Budget which may be seen either in the upcoming Budget or a Full Budget 2024 –
- Continuation of Infra push including Roads, Railways, Renewable energy etc. will have multiplier effect on the economy and employment generation.
- Policies from the government that attract both domestic and foreign capital, fostering growth in our country’s start-up ecosystem.
- Offering tax credits for early-stage start-ups is crucial for incentivizing innovation and we are hoping that the government will address the ongoing concern on angel tax, paving the way for smoother operations.
- The government should allocate separate budgets for Artificial Intelligence (AI) and R&D in the Tech space which can elevate India’s Tech prowess and unlocking the full potential of the digitalized industries across segments. Generative AI (GenAI), will deliver significant top- and bottom-line benefits and enhance Industry’s ability to build trust with stakeholders.
- Insurance penetration In India is in single digit (excl Govt run programs) and needs a large booster. Policy changes to that effect and GST reduction will be key to that effect.
- To improve ease of doing business, all business regulatory approvals should come through the National Single Window System (NSWS) in a time-bound manner.
- Extension of the concessional tax rate for eligible manufacturing units to March 31, 2025, and expanding the PLI scheme to labour-intensive sectors.