New Delhi:
INDIA bloc parties will stage protests in and outside Parliament today against what they describe as “discrimination” against opposition-ruled states in the recently unveiled Union Budget.

1. The high-level meeting saw participation from several prominent leaders, including the Leader of Opposition in the Lok Sabha Rahul Gandhi, Congress’ deputy leaders in both houses Pramod Tiwari and Gaurav Gogoi, NCP (SCP) chief Sharad Pawar, Shiv Sena (UBT) leader Sanjay Raut, TMC’s Derek O’Brien and Kalyan Banerjee, DMK’s TR Baalu, JMM’s Mahua Maji, AAP’s Raghav Chadha and Sanjay Singh, and CPI(M)’s John Brittas. Congress general secretaries KC Venugopal and Jairam Ramesh were also present.

2. “The concept of a budget has already been destroyed by this year’s Union Budget. They have completely discriminated against most of the states. So, the general sentiment of the INDIA bloc meeting was we have to protest against this,” said Mr Venugopal claimed following the meeting. He later expressed on social media that the budget was “extremely discriminatory and dangerous,” going against the principles of federalism and fairness.

3. As part of their protest, Congress chief ministers will also boycott the NITI Aayog meeting scheduled for July 27. “This government’s attitude is completely antithetical to Constitutional principles. We will not participate in an event that is solely designed to hide the true, discriminatory colors of this regime,” Mr Venugopal alleged.

4. On Tuesday, Finance Minister Nirmala Sitharaman presented the Budget for 2024-25, marking her seventh consecutive budget presentation, surpassing former Prime Minister Morarji Desai’s record. This budget is the first under Prime Minister Narendra Modi’s third term in office. During her speech, Ms Sitharaman said that the country’s inflation remains stable and is moving towards 4 per cent, with core inflation at 3.1 per cent.

5. “The ‘#BudgetForViksitBharat’ ensures inclusive growth, benefiting every segment of society and paving the way for a developed India,” wrote Prime Minister Narendra Modi on social media. 

6. Speaking exclusively with NDTV, Union Minister Kiren Rijiju claimed that “no one with a sane mind” will criticise the 2024 Union Budget. “I feel this Budget lays the strongest-ever foundation for ‘atmanirbhar’ Bharat because the Prime Minister has already given a clear-cut vision to make India a developed nation by 2047,” he said. 

7. Ms Sitharaman highlighted several key points in the budget, including rewards for key NDA allies, tax relief for new taxpayers, and a focus on job creation for youth. 

8. The budget introduced several changes to the tax regime, increasing the standard deduction in the new tax regime from Rs 50,000 to Rs 75,000 and revising tax slabs to benefit a broader range of income groups. Salaried employees can now save up to Rs 17,500 in income tax under the new slabs.

9. Additionally, the budget included a major announcement for professionals entering the workforce. The government will provide one month’s salary as a Provident Fund contribution for first-time employees, benefiting an estimated 210 lakh youngsters. Additional measures include raising the exemption limit for capital gains on some financial assets to Rs 1.25 lakh per year and abolishing angel tax for all classes of investors.

10. The budget also earmarked significant projects for Bihar and Andhra Pradesh, states whose political leaders recently aligned with the BJP to secure a parliamentary majority. For Bihar, the budget outlines the development of expressways and a power plant, while Andhra Pradesh will see infrastructure projects prioritised, including substantial financial support for capital development.

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New Delhi:

The price of cigarettes will remain unchanged after the government announced no hike in the existing tax rates on tobacco products in the 2024 Union Budget. This came as a welcome move by ITC, India’s biggest cigarette producer, whose shares surged as much as 5 per cent. The stock was last seen trading 4.67% higher at Rs 488.35 on the National Stock Exchange (NSE).

Taxation of tobacco products primarily falls under the jurisdiction of the Goods and Services Tax (GST) Council, although the central government also imposes a National Calamity Contingent Duty (NCCD) on cigarettes, which is subject to adjustments during the Union Budget. In her recent Budget address, Finance Minister Nirmala Sitharaman chose not to increase tobacco taxes, maintaining the rates that were last altered with a 16 per cent hike in NCCD the previous year.

Cigarettes are a major revenue driver for ITC, contributing more than 80 per cent of the company’s net profit and about 45 per cent of its total revenue. According to a report by the Economic Times, ITC shares have consistently posted positive returns on Budget Day over the past decade, even amid several tweaks in the NCCD tax.

ITC’s stock price opened at Rs 467.05 per share on the Bombay Stock Exchange (BSE) today, reaching an intraday high of Rs 489.80 and a low of Rs 466.55. 
 

As of the end of March 2024, NBFCs had a CRAR of 26.6%, a GNPA ratio of 4.0% and a return on assets (RoA) of 3.3%. (Representational image only)

Ahead of the upcoming Union Budget scheduled to be presented on July 23, the Non-Banking Financial Company (NBFC) sector is expecting enhanced financial inclusion and reinforcing digitalisation efforts to sustain the sector’s growth.

Finance Industry Development Council (FIDC), which represents the industry, has suggested establishing a special refinancing body, just as the government has created National Housing Bank (NHB) for housing finance companies.

On the other hand, the sector this year has seen stringent regulatory action from the Reserve Bank of India (RBI). Additionally, speaking at an event in May this year, RBI Deputy governor J. Swaminathan cautioned the NBFCs not to be overly reliant on algo-based credit models. However, the apex bank, in its 29th Financial Stability Report (FSR) said that the NBFCs are well capitalised, giving an edge to the financial sector in the country.

As of the end of March 2024, NBFCs had a CRAR of 26.6%, a GNPA ratio of 4.0% and a return on assets (RoA) of 3.3%.

“The growth of the Indian NBFC industry is significantly influenced by robust financial inclusion, consumer demand and improving trade balances. The upcoming Union Budget should emphasise enhancing financial inclusion across the country, implementing policy reforms, and reinforcing digitalisation efforts to sustain the sector’s growth.

Financial and digital inclusion will enhance credit access by increasing convenience and reducing turnaround times,” said Rakesh Kaul, CEO, Clix Capital.

“The government must consider incentivising and promoting such measures so that NBFCs can carefully take advantage of global integration, ensuring sustainable growth and financial inclusion across India’s diverse economic landscape,” said Jitendra Tanwar, Managing Director & CEO of Namdev Finvest Private Limited.

He further added that the government must consider incentivising and promoting such measures so that NBFCs can carefully take advantage of global integration, ensuring sustainable growth and financial inclusion across India’s diverse economic landscape.

Expressing his confidence in the Budget this year, Krishan Gopal, CFO, Aye Finance, said, “I believe this Budget will lay the groundwork for India’s vision of development by 2047. We expect the Government to recognise the efforts of NBFC lenders that are transforming micro-enterprise lending in India by providing customised credit lines, announcing schemes and subsidies and even considering classifying them as Priority Sector Lenders.”

“Despite strong competition from banks, non-banking financial companies (NBFCs) have shown remarkable resilience in retaining a significant market share. To drive further growth, we seek policies that promote responsible credit utilisation, enhance access to credit for underserved communities, and foster financial literacy among customers,” said Mathew Muthoottu, MD Muthoottu Mini Financiers Limited.

”NBFCs are expecting the Budget to carry provisions that spur consumption, such as via tax relief etc.; implement initiatives that enable growth of NBFCs serving priority sector clients; and undertake widespread campaigns aimed at inculcating good credit behaviour amongst the country’s growing borrower base,” opined Neha Juneja, Co-founder and CEO, IndiaP2P, on her Budget expectations.

Anticipating the allocation of additional funds for the sector, Pavitra Walvekar, the CEO of Kudos Finance, which is based out of Pune, said, “Key initiatives should include the allocation of additional funds to improve liquidity for NBFCs and the introduction of regulatory reforms to streamline operations and enhance transparency. These steps will bolster credit availability, particularly for underserved segments like MSMEs, and promote financial stability in the long run.”

Congress general secretary Jairam Ramesh. File
| Photo Credit: PTI

The Congress on July 12 said the forthcoming Budget must address fundamental questions such as why private investment is “very sluggish” and private consumption is not picking up as the party dismissed claims that economic growth is accelerating sharply and large numbers of jobs being created.

Union Finance Minister Nirmala Sitharaman is scheduled to present the Budget for 2024-25 in the Lok Sabha on July 23.

Congress general secretary, in-charge communications, Jairam Ramesh said, “The non-biological PM’s cheerleaders and drumbeaters claim that economic growth is accelerating sharply and that jobs are being created in large numbers. But if this was the case — and it is not — Why is private investment, a key engine of economic growth, still so very sluggish recording a 20-year low during April-June 2024? Why is private consumption, another key engine of economic growth, not picking up except at the high end,” Mr. Ramesh asked.

“Why have household savings plummeted to record lows and household debt shot up to record highs? Why have rural wages continued to fall and why is the wage share of national income declining?” he said, adding, why is manufacturing as a share of GDP at a record low and still decreasing? Why has the informal sector lost 17 lakh jobs in the last seven years? Why did unemployment reach a 45-year peak, with unemployment for young graduates at 42%?” the Congress general secretary said.

“These are fundamental questions that the forthcoming Budget will have to address while the Finance Minister sings praises of the non-biological PM,” Mr. Ramesh said.

On Thursday, the BJP claimed that around 12.5 crore jobs were created in the last 10 years of the Modi government and cited the latest Reserve Bank of India report to assert the creation of “five crore jobs in 2023-24 alone”.

Several experts have urged the government to provide tax relief to the common man to boost consumption and take steps to check inflation and accelerate economic growth.

The economy has recorded a growth rate of 8.2% in 2023-24. Earlier in February, Ms. Sitharaman presented an Interim Budget for 2024-25 in view of the Lok Sabha elections.

A person uses an Electric Vehicle charging station installed by Greater Hyderabad Municipal Corporation (GHMC) and Telangana Renewable Energy Development Corporation Ltd, in Hyderabad on Thursday, June 20, 2024.
| Photo Credit: NAGARA GOPAL

The growth of the automotive industry in India has happened because of the excellent road infrastructure which has been created during the last couple of years. A lot of intercity travel means that consumers want to have luxury cars, they want to have safer cars and that has helped to drive growth in the industry.

This time from the Union Budget we would expect not only continuity in infrastructure spending but also increased spending on road infrastructure because there exists a lot of head-room for improvement for the industry to grow.

For long-term success of electrification of automobiles, one of the big factors helping us, is the reduced duty structure that enables to price Electric Vehicles (EVs) close to Internal Combustion Engines (ICE) cars. Our expectation is the government comes out with a clear policy roadmap and gives a statement that these incentives on taxes will continue for the next 8 to 10 years.

This will give confidence to customers to get into EVs and also OEMs to invest more when it comes to electrification. OEMs like us would be interested in introducing new cars in the Indian market. In addition, there is also a pressing need for the State governments to continue their commitment towards EV adoption, continuing the tax breaks and incentives that attract end consumers.

For charging infrastructure the onus is on Charging Point Operators (CPOs) to set up the desired network to democratise their chargers. Today, we find that a lot of CPOs are not opening up their APIs so the customers need to download multiple apps to charge their cars.

To address this the government can come with a common platform for all CPOs to list, so that customers have the ease of payment like UPI to transact when it comes to charging their EVs. Apart from this, there are a lot of good ideas the world over to make it toll free for electric cars, providing special parking facility in cities for EVs. So, I think, no amount of incentives is less, because electrification needs a major push from the government.

As India aggressively transitions towards carbon neutrality, the government’s role also becomes more pronounced. We believe the road towards creating a carbon-neutral ecosystem will come from zero emission, which can be delivered by electrification. OEMs, their suppliers, vendors, policymakers and all other key stakeholders have to come together, work in close cooperation to ensure we create a robust, resilient and time-bound EV ecosystem.

At OEM level, the industry is ensuring that we actively encourage the EV adoption not just by launching high-tech and desirable product offerings, but we also focus on easing the total cost of ownership. This the OEMs are doing via offering long battery warranties, attractive residual value for EVs which are comparable to ICE vehicles and also extending service intervals to prolong any workshop visits.

The industry should continue to not only focus on introducing new products, but also spend their time and resources for enhancing consumer-education initiatives across markets. The actual acceleration for EV adoption can only happen when there is a strong demand from consumers for these technologies; but for that, we need concerted and coordinated efforts from OEMS, policymakers and customers.

When it comes to import duties, we have been in India for 30 years doing business based on the current taxation structure. Though lower taxes are always welcome, we also need to be pragmatic considering the current economic as well as political compulsions. So, we are realistic there, when it comes to tax cost. Hopefully, there are no increases as such in this Union Budget and there is continuity in taxation which should help us to do business as usual.

We expect the Indian auto industry to grow at 7% to 8% or maximum at 10% this year. The luxury car market size is 1 to 1.2% of the total industry and this segment should grow in double digit, may be slightly faster than the mass market passenger cars, because the base is low.

Right now, if you look at the enablers; the stock market is at all-time high, the real estate sector is doing well, tax collections are at a record high. So, we do not see any impediments to achieve the projected growth. With the incoming festive season combined with the wedding season and the depreciation month of September [a lot of consumers buy cars in September to claim depreciation benefits), I think the market will remain strong in the rest part of the year as well.

(Santosh IyerisManaging Director & CEO, Mercedes-Benz India. As told to Lalatendu Mishra)