modi 3.0 budget – Artifex.News

What PM Told NDTV In May, Budget Reflects Them In July

admin — Tue, 23 Jul 2024 09:35:54 +0000

PM Narendra Modi described Budget 2024 as “visionary”

New Delhi:

A month before the Lok Sabha election results and two months before the first budget by Modi 3.0, Prime Minister Narendra Modi had outlined his government’s priorities in an exclusive interview with NDTV’s editor-in-chief Sanjay Pugalia. Many of those priorities have translated into proposals in the budget presented by Finance Minister Nirmala Sitharaman in Parliament today.

PM Narendra Modi spoke to NDTV editor-in-chief Sanjay Pugalia in May

The Prime Minister had spoken about his government’s focus on job creation and welfare schemes for asset generation. Budget 2024 incentivises job creation in the private sector, extends a warm welcome to new professionals and tweaks tax slabs under the new regime to benefit salaried professionals.

The government has announced that it will give one month’s salary (up to Rs 15,000) to every new professional who registers with EPFO. This amount will be provided through the Direct Benefit Transfer mode and deposited in the employee’s Provident Fund in three instalments. This initiative, Ms Sitharaman announced, will benefit over 2 crore youngsters.

The Budget has also proposed that employers will be reimbursed for two years for their PF contribution for every new staff. This reimbursement is capped at Rs 3,000 per month.

The Finance Minister also announced a scheme to provide internship opportunities in 500 top companies — a move it expects to benefit over 1 crore youngsters. Under this scheme, an allowance of Rs 5,000 per month and a one-time assistance of Rs 6,000 will be provided to interns.

With an eye on asset generation, the Budget has proposed to increase the exemption on capital gains on some financial assets to Rs 1.25 lakh per year.

The Budget had good news for salaried professionals, too. The standard deduction in the new tax regime has been increased from Rs 50,000 to Rs 75,000.

This Budget has revised tax slabs under the new regime. Annual income up to Rs 3 lakh will now attract zero tax, income in the Rs 3 lakh-7 lakh bracket will be taxed at 5 per cent. The rate will be 10 per cent for income between Rs 7 lakh -10 lakh, 15 per cent for Rs 10 lakh – 12 lakh and 20 per cent for Rs 12 lakh – Rs 15 lakh. Annual income over Rs 15 lakh will attract 30 per cent tax. Ms Sitharaman said salaried employees can save up to Rs 17,500 in income tax under the new tax slabs.

Land reforms is another area in which the Prime Minister’s vision has been implemented in this Budget. Speaking to NDTV, Prime Minister Modi had spoken about the need for land reforms. Budget 2024 proposes Unique Land Parcel Identification Number or Bhu-Aadhaar for all tracts of land. It added that land records in urban areas will be digitised with GIS mapping and proposed the establishment of a land registry.

Medium and Small Scale Industries (MSME) have been a key focus area of the Narendra Modi government since 2014. In his interview to NDTV, the Prime Minister had spoken about how the government ensured that MSMEs kept running during the Covid pandemic.

This focus was reflected in Budget 2024 too. The government announced a Credit Guarantee Scheme for MSMEs in the Manufacturing sector and credit support during stress situations. Under the Mudra scheme for micro-industries, the loan limit in the Tarun category was enhanced from Rs 10 lakh to Rs 20 lakh.

Shortly after Ms Sitharaman’s budget speech, Prime Minister Modi praised it for its focus on youth, backward sections, women, the middle class and manufacturing and infrastructure sectors. “This visionary budget will uplift and empower every stratum of our society, paving the way for a brighter future for all,” he said.

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Union Budget 2024 Expectations: Keep increasing road-infra spending, frame policies to promote electrification

admin — Fri, 12 Jul 2024 01:30:00 +0000

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)

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MSMEs need funds for tech upgrades, green transition

admin — Thu, 11 Jul 2024 01:30:00 +0000

With schemes that provide funds for infrastructure creation, technology upgradation and climate change adaptation, the MSME sector will be able to contribute even more for the economy
| Photo Credit: Siva SaravananS

Recently, Union Minister for MSMEs Jitan Ram Manjhi said six pillars were identified as focus areas for the growth of the MSME sector — formalisation and access to credit, increased access to market and e-commerce adoption, higher productivity through modern technology, enhanced skill levels and digitalisation in the service sector, support to Khadi, Village, and Coir industry to globalise them, and empowerment of women and artisans, through enterprise creation.

While the interim Union Budget presented in February this year maintained stability, the upcoming Budget must strike a balance to fuel growth, curb inflation, generate employment, promote MSMEs, support ease of doing business, and promote the manufacturing sector.

The other important area that must be prioritised is infrastructure development for sustainable economic growth, especially in industrial clusters.

The Government did exceedingly well for the economy with exports clocking a Compounded Annul Growth Rate (CAGR) of 8.5% in the last six years moving from $478 billion in FY18 to $778 billion in FY24.

We are now aiming to reach $2 trillion by FY30, which requires a CAGR of 14.4%. This is a challenge in the current geo-political situation but within the realm of the reach. It requires supporting exporters and the MSME sector by providing an enabling and supportive ecosystem.

Supporting MSMEs to generate employment, increase exports

The importance of bolstering MSMEs is more important in the current situation as the sector is the backbone of the Indian economy and a key employment generator. For this sector to sustain and grow in the current challenging situation, one strong demand by the MSMEs is that the non-performing asset (NPA) timeline be extended to 180 days from 90 days. It will provide relief to the sector as many MSMEs are struggling because of this. The Credit Guarantee Scheme for micro and small enterprises in the manufacturing sector must also be revamped.

The Interest Equalisation Scheme emphatically supports exports. This scheme may be extended for a period of five years. Coming to the rise in interest rates consequent to the increase in repo rate from 4.4% to 6.5% in the last two years, the subvention rates may be restored from 3% to 5% for manufacturers in MSMEs and from 2% to 3% for all in respect of 410 tariff lines.

For the textile and garment sector, which is dominated by MSMEs, the Remission of Duties and Taxes on Exported Products and Rebate of State and Central Taxes and Levies schemes should be extended for another five years for the sector.

The Budget must consider reintroducing the Emergency Credit Line Guarantee Scheme for MSME exporters for another two years. This supported most MSME units with their exports.

The timeline for payments to MSME jobwork must be extended to 120 days from the current 45 days as the RBI permits a time limit of 180 days for the realisation of export proceeds.

Unless the payment from buyers are realised by exporters, it will be difficult to pay MSME workers, which will create fund flow issues for exporters.

Another flagship scheme of the government is the PLI scheme, which is working well for large-scale industries. For the textile and garment sector, the investment limit under the PLI scheme must be brought down to ₹25 crore and the turnover limit must be reduced to ₹70 crores. This will help MSME exporters to upgrade their technologies and compete in the international market.

Incentivise green transition, R&D

Another significant area of concern is climate change. This has impacted MSMEs severely. Hence more soft funds must be made available for MSMEs to attempt a green transition and to fuel growth with green resources. MSME clusters like Tiruppur can tap into significant export potential with this support.

Research, development and innovation are key to sustaining exports. R&D globally is incentivised and 35 out of 38 OECD countries provide either lower taxes or higher deductions on R&D expenditure.

We expect that the weighted tax deduction under Section 35(2AB) may be increased to 300% and the benefit under Section 35(2AB) also be extended to limited liability partnerships (LLP), partnership firms and proprietary firms, as MSME units largely fall in these categories.

With schemes that provide funds for infrastructure creation, technology upgradation and climate change adaptation, the MSME sector will be able to contribute even more for the economy

(A. Sakthivel is honorary chairman of Tiruppur Exporters Association and former chairman of Federation of Indian Export Organisations and Apparel Export Promotion Council)

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MSMEs need funds for tech upgrades, green transition

admin — Thu, 11 Jul 2024 01:30:00 +0000

With schemes that provide funds for infrastructure creation, technology upgradation and climate change adaptation, the MSME sector will be able to contribute even more for the economy
| Photo Credit: Siva SaravananS

Recently, Union Minister for MSMEs Jitan Ram Manjhi said six pillars were identified as focus areas for the growth of the MSME sector — formalisation and access to credit, increased access to market and e-commerce adoption, higher productivity through modern technology, enhanced skill levels and digitalisation in the service sector, support to Khadi, Village, and Coir industry to globalise them, and empowerment of women and artisans, through enterprise creation.

While the interim Union Budget presented in February this year maintained stability, the upcoming Budget must strike a balance to fuel growth, curb inflation, generate employment, promote MSMEs, support ease of doing business, and promote the manufacturing sector.

The other important area that must be prioritised is infrastructure development for sustainable economic growth, especially in industrial clusters.

The Government did exceedingly well for the economy with exports clocking a Compounded Annul Growth Rate (CAGR) of 8.5% in the last six years moving from $478 billion in FY18 to $778 billion in FY24.

We are now aiming to reach $2 trillion by FY30, which requires a CAGR of 14.4%. This is a challenge in the current geo-political situation but within the realm of the reach. It requires supporting exporters and the MSME sector by providing an enabling and supportive ecosystem.

Supporting MSMEs to generate employment, increase exports

The importance of bolstering MSMEs is more important in the current situation as the sector is the backbone of the Indian economy and a key employment generator. For this sector to sustain and grow in the current challenging situation, one strong demand by the MSMEs is that the non-performing asset (NPA) timeline be extended to 180 days from 90 days. It will provide relief to the sector as many MSMEs are struggling because of this. The Credit Guarantee Scheme for micro and small enterprises in the manufacturing sector must also be revamped.

The Interest Equalisation Scheme emphatically supports exports. This scheme may be extended for a period of five years. Coming to the rise in interest rates consequent to the increase in repo rate from 4.4% to 6.5% in the last two years, the subvention rates may be restored from 3% to 5% for manufacturers in MSMEs and from 2% to 3% for all in respect of 410 tariff lines.

For the textile and garment sector, which is dominated by MSMEs, the Remission of Duties and Taxes on Exported Products and Rebate of State and Central Taxes and Levies schemes should be extended for another five years for the sector.

The Budget must consider reintroducing the Emergency Credit Line Guarantee Scheme for MSME exporters for another two years. This supported most MSME units with their exports.

The timeline for payments to MSME jobwork must be extended to 120 days from the current 45 days as the RBI permits a time limit of 180 days for the realisation of export proceeds.

Unless the payment from buyers are realised by exporters, it will be difficult to pay MSME workers, which will create fund flow issues for exporters.

Another flagship scheme of the government is the PLI scheme, which is working well for large-scale industries. For the textile and garment sector, the investment limit under the PLI scheme must be brought down to ₹25 crore and the turnover limit must be reduced to ₹70 crores. This will help MSME exporters to upgrade their technologies and compete in the international market.

Incentivise green transition, R&D

Another significant area of concern is climate change. This has impacted MSMEs severely. Hence more soft funds must be made available for MSMEs to attempt a green transition and to fuel growth with green resources. MSME clusters like Tiruppur can tap into significant export potential with this support.

Research, development and innovation are key to sustaining exports. R&D globally is incentivised and 35 out of 38 OECD countries provide either lower taxes or higher deductions on R&D expenditure.

We expect that the weighted tax deduction under Section 35(2AB) may be increased to 300% and the benefit under Section 35(2AB) also be extended to limited liability partnerships (LLP), partnership firms and proprietary firms, as MSME units largely fall in these categories.

With schemes that provide funds for infrastructure creation, technology upgradation and climate change adaptation, the MSME sector will be able to contribute even more for the economy

(A. Sakthivel is honorary chairman of Tiruppur Exporters Association and former chairman of Federation of Indian Export Organisations and Apparel Export Promotion Council)

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