Shri Ashishkumar Chauhan, MD and CEO at National Stock Exchange (NSE) :
“The budget for the financial year 2024-25 presented by Hon’ble Finance Minister Smt. Nirmala Sitharaman has given a huge fillip to job creation in India by ensuring that the private sector also participates in job creation in addition to the government sector while ensuring that India becomes the number 1 start up nation and a nation of entrepreneurs by providing relief on the angel tax as well as increasing Mudra loan scheme limit from Rs 10 lakhs to Rs 20 lakhs per person. She has also focused on increasing women participation in India’s labour force which will help India reap demographic dividend even further by increasing young women’s participation in the workforce. Skill development as a part of job creation has been also an out of the box idea from her while keeping infrastructure outlay intact and reducing fiscal deficit at 4.9% from the expectation of 5.1%. All these things are being achieved without much tinkering with the direct or indirect tax structure ensuring that India’s long term credit rating improves by giving a glide path to 4.5% fiscal deficit in 2025-26. Overall, 10/10.”
Aditya Birla Sun Life AMC Ltd:
4.9% fiscal deficit in FY25 ensuring macro stability continues. It is mildly positive for small ticket consumption due to marginal reduction in personal tax, welfare schemes and focus on job creation through multiple schemes. The increase in capital gains tax is marginally negative and it’s a move towards a uniform tax structure across asset class. However, the overall economic growth is robust and given no adverse impact on corporate earnings, the markets should stabilize.”
Harish Krishnan, Co-CIO & Head Equity, Aditya Birla Sun Life AMC Ltd :
“On macro, budget approach of fiscal glidepath along with continual investment in infrastructure as well as some reduction in taxes for consumer is welcome, however has been overshadowed by changes made in terms of capital gains taxes. This certainly increases the hurdle rate for investors in financial assets, and hence there is a sentimental negative. Markets had gone up in the run up to the event over the last few months, and hence could result in some cool-off in financial markets, before the focus moves back to corporate earnings, and strength of Indian economy.”
Kaustubh Gupta, Co-Head, Fixed Income, Aditya Birla Sun Life AMC Ltd :
“This is an inclusive budget with focus on macro stability. This aims to uplift India’s long term growth by sticking to fiscal prudence and tax reforms. We expect benchmark yields to trend towards 6.50%.”
Anil G. Verma, Executive Director & CEO, Godrej & Boyce :
The first full budget of the new Government was a balanced one with the Government delicately balancing the needs of the economy through its focus on the nine priority areas of agriculture, employment, inclusive development, manufacturing and services, urban development, energy, infrastructure, innovation and R&D, and next generation reforms.
The reduction in FY25 fiscal deficit target from 5.1% to 4.9% is macro-positive. The capex outlay kept unchanged as Rs.11.1 lakh crore, shows the government’s unwavering focus on investments to drive the economy forward.
With a provision of Rs.1.48 lakh crore, employment and employability have been given a major fillip which indeed is the need of the hour. A new scheme offering internship opportunities at 500 top companies for 1 crore students over the next five years will go a long way in boosting employability.
The Government’s intention to partner with the private sector to develop small modular reactors is a good step emphasising the importance of nuclear energy in India’s energy mix. Moreover, the Rs.1000 crore venture capital fund to promote space technology is a welcome step in encouraging greater participation of the private sector in India’s burgeoning space sector, where we have the potential of being the global leader for satellite launches.
The Budget has managed to pave the way towards an inclusive economic growth, through measures that will encourage greater private sector participation while maintaining the fiscal glide path to 4.5% fiscal deficit in FY26.
A slew of measures aimed at MSMEs is likely to ease the pressure on this crucial sector of the economy contributing 30% to India’s GDP.
The increase in standard deduction from Rs.50,000 to Rs.75,000 and favourable change in the tax slabs under new regime will increase disposable income in the hands of consumers which is likely to boost consumption. This will provide the necessary impetus towards larger private investments in capacity building.
The Godrej Enterprises Group looks forward in contributing towards the vision of Viksit Bharat 2047.
Yatin Gupte, Chairman & Managing Director, Wardwizard Innovations & Mobility Ltd :
“We at Wardwizard Mobility welcome the Government’s progressive and forward-thinking Union Budget 2024-25. The commitment to maintaining strong fiscal support for infrastructure projects over the next five years is a significant boost for the automotive sector. The announcement to fully exempt customs duty on critical materials, such as rare earth metals including lithium, can further incentivize electric mobility. We are looking forward to receiving the benefit of this exemption along with the sectors mentioned by the Hon’ble Finance Minister. The focus on increasing women’s participation in the workforce will also benefit the sector. The Union Budget 2024-25 presents tremendous growth opportunities for all sectors, and Wardwizard Mobility is committed to contributing to India’s journey toward a cleaner, more inclusive, and sustainable future.”
Dhiraj Relli, MD & CEO, HDFC Securities :
The latest Union Budget on an overall basis is broadly positive despite the higher tax on capital gains and higher STT. The negative sentimental effect of the higher taxes may be over in a couple of days.
The provision for boosting spends in the agri sector, increase in spend on affordable housing, new schemes to provide incentives for employment generation etc. may lay the foundation for medium-term inclusive growth.
The sharp cutback in net borrowings and a cut in fiscal deficit could have a positive impact on interest rates and the attitude of foreign investors and rating agencies towards India. There exists a chance of a rating upgrade for India a few months down the line.
The nominal GDP growth for FY25 is expected at 9.9-10%. Given the fact that the FY25 real GDP is slated to grow at 6-8-7%, the inflation is derived at ~3%. We think there could be an upside to the nominal GDP growth estimated.
Based on the series of announcements made so far, the Budget has made provisions for increasing allocation to rural areas and the agri sector. This could spur consumption in rural areas. Putting more money in the hands of urban people by way of higher standard deductions, higher deductions for family pension and changes in slab rates under the new tax regime will do the same for urban consumption. Separate encouraging measures have been spelt out for the aquaculture/seafood industry, and leather and textile sectors.
Cutting rates for TDS and allowing TCS amounts to be set off against TDS liability for employees are welcome measures.
Cutting import duty on Gold will moderate the rise in gold prices lately and make gold a bit unattractive as an investment avenue at least temporarily.
The Employment-linked incentive scheme has the potential to create lakhs of jobs if implemented well and make India’s growth more inclusive. A number of farming and rural-led initiatives could continue to boost rural incomes and the economy and have trickle-down effects across the larger economy with some lag.
Investors are more concerned about possibilities to make money or gains rather than get too bothered by a 250 or 500 bps increase in tax rate from a low base. As of now the Indian market offers opportunities to make money and hence the move to raise capital gains tax may not dissuade investors. However, as the difference in the rates has risen to 750 bps from the earlier 500 bps, investors may, if all things stay the same, want to hold on to their investments for a longer period to avail of the lower rate, displaying better investor behavior. Also, the hike in the exemption limit from Rs.1 lakh to Rs.1.25 lakhs for LTCG is welcome and may offset to some extent the higher incidence of tax due to higher rates.An increase in STT rates may have some impact on depth and liquidity, especially in the F&O markets, post Oct 01, but Indians are adept at adjusting to emerging situations and we are not too worried about the medium-term implications of this rise.
Focus will now turn to the progress of the monsoon, balance Q1 corporate results, global interest rate trends, local political developments including state elections and US presidential elections and their likely impact on India.
Corporate earnings may see an upward revision if the monsoon progresses well and macro parameters continue to show encouraging trends.
A big event is out of the way and so is its overhang. The outcome not being more negative than expected/possible, the markets recovered well from the lows of the day. Dip buying may continue for some time as foreign investors may be broadly happy with the overall thrust of the Budget.
Valuation of Indian markets may inch up a bit but a sharper rerating may require a higher level of visibility on macro stability and micro growth. We remain cautiously bullish on the Indian equity market post the latest Union Budget.
Akshay Munjal, Founder & CEO, Hero Vired :
“I applaud the Government’s strong emphasis on education, skilling, and employment in the Union Budget 2024. Amid growing concerns about the impact of AI on job creation, the substantial allocation of Rs. 1.48 lakh crore for these sectors demonstrates a significant commitment to developing India’s human capital. The introduction of various schemes to promote skilling and job creation is poised to significantly boost economic growth. Additionally, the comprehensive scheme providing internship opportunities in 500 top companies to 1 crore youth over five years, funded partly through CSR, is a welcome initiative. This will give the youth valuable exposure to real-life business environments and diverse professions, further enhancing their employment prospects while ensuring a future-ready workforce.”
