Industry Reactions on Union Budget 2024 Announcements

The government of India has announced its Union Budget 2024 wherein huge emphasis has been given towards driving 'Make in India' initiative, employment generation, skills development and development of startup ecosystem.

Here are some reactions from various corners of the industry:

Lt. Gen. Dr. S.P. Kochhar, Director General, Cellular Operators Association of India (COAI), said, "COAI has always worked closely with the Government towards raising the level of telecom connectivity in the country and appreciates the Government’s rich initiatives and prudent steps undertaken in this regard. For the Budget 2024-25 though, our long-standing demands remain unaddressed, and we will continue to work with the Government for the same.

The telecom sector maintains that the Universal Service Obligation Fund (USOF) levy be abolished/suspended considering the huge unutilized corpus in the USO Fund to the tune of nearly Rs. 80,000 crores. Till the utilisation of this fund, no USOF levy should be charged from the operators. Further, the License Fee needs to be reduced from 3% to 0.5%-1%, to cover the administrative costs of the Government only, and also clarifying the definition of Gross Revenue (GR) to exclude revenue from activities not requiring a license.

The Government has also proposed to increase Basic Customs Duty from 10% to 15% on PCBA of certain specified telecom equipment. This will increase cost of providing services as the telcos are continuously upgrading their networks with the advent of the new technology.

COAI has previously requested exemptions on customs duties for certain telecom equipment to alleviate the cost challenges associated with deploying this critical infrastructure. Over the past 5 to 6 years, the Government of India has gradually increased the customs duty on telecom equipment to 20%, posing a substantial financial burden and significantly impacting the rollout of 5G services in India. It is recommended that the customs duty be reduced to zero and then gradually increased depending on the creation of an ecosystem for manufacturing of telecom gear in India.

Further, until high-quality equipment is available domestically at competitive prices, COAI urges the government to reduce customs duties for 4G and 5G network products, as well as other related items, to NIL."

Lt. Gen. AK Bhatt (Retd.), Director General, Indian Space Association (ISpA), said, "The Union budget's vision to grow India's space economy by fivefold in the next decade demonstrates the government's strong commitment to this sector. We previously advocated for increased financial incentives to support the burgeoning space startups in the country. The announcement of a ₹1000 crore VC fund is a step forward, addressing the funding challenges faced by these nascent ventures in this capital-intensive domain. Additionally, the proposal for establishment of 12 industrial parks across India we hope will include the space sector as this will provide a substantial boost to the space and satellite manufacturing industry, which has long called for the creation of space parks. These measures are pivotal for the growth and development of India's space ecosystem."

A. Gururaj, Managing Director, Optiemus Electronics Ltd., said, "We welcome the initiatives announced in the Union Budget. The significant emphasis on manufacturing is heart warming and much needed for the growth of the economy. With the substantial expansion of the electronics manufacturing industry, the demand for a skilled workforce has become paramount. The announcement of various skilling initiatives and the scheme to incentivize additional employment in the manufacturing sector, particularly for first-time employees, will provide essential support to industries reliant on skilled workforce, especially in electronics. Furthermore, the proposal to reduce the Basic Customs Duty on mobile phones, mobile PCBA, and mobile chargers to 15% is a positive step. The measures laid out to support the MSME industries in particularly welcome to create a much needed supplier base for electronics within India. These measures collectively send out a strong message on the manufacturing sector and related eco system in India."

Joyshree Das Verma, National President, FICCI FLO, said, "This year's budget marks a significant stride towards enhancing women‘s role in India’s economic development. The allocation of more than Rs 3 lakh crores for women-specific schemes and skilling programs underscore the government's commitment to women-led development and enhancing economic inclusivity. The government is creating a supportive environment for women professionals through market access to women-led Self Help Groups and the establishment of working women's hostels and creches in partnership with businesses. Furthermore, the reduction in duties for properties purchased by women and the introduction of the NPS Vatsalya scheme, which promotes long-term savings for minors, exemplify the government's commitment to an inclusive financial landscape for women and their families. Schemes like PM Vishwakarma, PM SVANidhi, Mudra Yojana and Lakhpati Didi are a testament to the transformative impact of targeted financial support for women. FICCI FLO stands poised to collaborate closely with the government to ensure these initiatives translate into tangible benefits for women entrepreneurs. Together, we can accelerate the momentum towards gender equality and inclusive growth, enabling women entrepreneurs to thrive and contribute significantly to the nation's economy".

Agendra Kumar, Managing Director, Esri India said, “It was encouraging to see the focus given in the budget on Infrastructure, Energy sector and urban development. GIS plays a very important role in these sectors. The Finance Minister spoke about improving productivity in the agriculture sector and digital crop survey in 400 districts. GIS can be an important tool in these as well. The focus on rural land records, GIS mapping for urban land records, and the use of GIS for property tax collection also offer opportunities for the GIS industry. These will improve the income of cities which can be used to improve the quality of infrastructure in cities and to provide better living conditions to the citizens. The investment of more than Rs 11 lakh crores in infrastructure development is also a positive news for the GIS industry.”

Kavitha Ramachandragowda, Co-Founder and Executive Director, Routematic, said, "The Union Budget 2024-25 serves as a significant stride towards women's empowerment, earmarking over ₹3 lakh crore for initiatives benefiting women and girls. By facilitating higher participation of women in the workforce through the establishment of working women hostels and creches in collaboration with industry, the government is creating supportive environments for women professionals. The government's focus on higher education, women centric skilling, employability, and enhanced schemes for women entrepreneurs along with the abolition of the angel tax is commendable and will undoubtedly boost the startup ecosystem in India and representation of women in the Indian workforce.”

Neha Bagaria, Founder & CEO, Herkey, said, "As a woman entrepreneur, I am deeply encouraged by the Union Budget 2024-25's commitment to fostering women's participation in the workforce. The dedicated focus on creating hostels and women-specific skilling programs reflects a significant step towards gender parity in business. Moreover, the new credit guarantee schemes for MSMEs, which remove the burden of collateral requirements, will empower countless women-led enterprises to grow and innovate. This budget not only addresses immediate economic needs but also lays a strong foundation for a more inclusive and equitable future. It is heartening to see such a comprehensive approach to unlocking the potential of countless women across India."

Atul Soneja, Chief Operating Officer, Tech Mahindra said, "Employment and skilling are important pillars of a growing economy. The government's sustained focus on prioritizing skilling and employment is a commendable step towards enhancing human capital and creating job opportunities for the youth. In today's rapidly evolving world, skill development is critical, and the government's commitment to training 20 lakh young people over the next five years will help them in the job market and foster job creation nationwide, beyond the Tier-1 cities. This initiative aligns with the industry's increasing demand for a workforce equipped with contemporary skills. Further, the expansion of skill development programs to Tier-2 and Tier-3 cities resonates with the government's vision of 'Vikshit Bharat 2047'. These cities are emerging as talent hubs and will contribute to long-term growth and the creation of local employment opportunities. It will also strengthen the pace of infrastructure development and scale the R&D initiatives in the country.”

Archana Jahagirdar, Founder & Managing Partner, Rukam Capital, said, “We applaud the Hon’ble Finance Minister for abolishing the Angel Tax in the Union Budget presented today. The removal of this tax, which had raised major concerns among foreign investors regarding startup investments in the country, has been a long-standing demand of the startup ecosystem. This announcement provides much-needed relief and paves the way for further growth in this burgeoning sector. Additionally, the introduction of the credit guarantee scheme for MSMEs, the self-financing guarantee fund with a guarantee cover up to ₹100 crore, and the increase in the limit of Mudra loans to ₹20 lakh from the current ₹10 lakh are crucial supportive measures. These initiatives will significantly help entrepreneurs by easing access to finance, fostering innovation, and driving economic growth. We are optimistic that these steps will create a more conducive environment for startups and MSMEs to thrive.”

Dr. Yajulu Medury, Vice Chancellor, Mahindra University, said, "An increase in the budget allocation for the education sector is a positive development. It indicates a commitment to make education more affordable and accessible. Many private institutions already support research-based education through substantial subsidies. The new internship scheme could also encourage industries to offer paid opportunities, addressing the issues of unpaid internships. While this budget reflects a hopeful step towards stabilizing and enhancing education, especially after the challenges posed by the pandemic, we look forward to more support in research and competency-building."