A view of the industrial and logistics park at Chakan, Pune.
| Photo Credit: Special Arrangement

Logistics industry is expecting steps that will further improve ease of doing business in the country, incentives and benefits for green initiatives in the sector, among others, in the Union Budget for 2024-25, which is set to be presented by the Finance Minister Nirmala Sitharaman in the Parliament next week.

“There is significant scope to improve the ease of doing business by streamlining regulations and adopting digital processes. Simplifying and ensuring consistency in GST administration, greater clarity and standardisation in interpretation of customs procedures, and TDS regulations are crucial steps in this direction,” said R S Subramanian, Senior Vice President & Managing Director, DHL Express India.

Also read: The ideal track to run India’s logistics system

“I am optimistic that the Budget will prioritise infrastructure and logistics as critical levers of growth, consistent with the interim Budget,” said Rizwan Soomar, Chief Executive Officer and Managing Director, DP World North Africa and India Subcontinent.

“The Budget could include incentives and benefits for green initiatives in logistics which aligns with the overall decarbonisation goals of the government and the private sector,” Mr. Soomar said.

Streamlining the existing regulatory frameworks further will encourage greater private sector participation and innovation in logistics, he added.

“We anticipate seeing significant investments throughout the industry in multi-modal connectivity, including advanced air cargo terminals and infrastructure enhancements to create seamless trade corridors.

“We also anticipate a continued focus on trade facilitation, streamlining and digitising clearance processes, minimising delays and enhancing cargo movement efficiency,” said Kami Viswanathan, President, FedEx for MEISA region.

“As we approach the Union Budget 2024-25 announcement, TCI is optimistic about the government’s commitment to bolstering the logistics sector. Emphasis on infrastructure development, streamlined regulations, workforce upskilling, and enhanced investment in technology will drive efficiency and sustainability,” TCI Managing Director Vineet Agarwal said.

Policy to support innovation

TCI is looking forward to policies that support innovation and ease of doing business, ultimately contributing to the nation’s economic resurgence, he said.

Stating that Interem Relocations is optimistic about the continued emphasis on infrastructure development, technological integration, and policy reforms, company’s Group CEO Vishal Agarwal said, “We are particularly hopeful about the inclusion of diesel under the GST ambit, which would greatly aid in cost regulation.”

Locus.sh Founder & CEO Nishith Rastogi said, “Beyond infrastructure enhancements and tax reforms, there is an urgent need for strategic resource allocation to adapt to market dynamics, including fuel price fluctuations and supply chain disruptions… Additionally, incentives for green logistics and digital infrastructure development will be key to achieving our long-term goals.” “Continued government support is essential to foster innovation and assist startups in navigating this evolving landscape, ensuring that the sector remains competitive and resilient,” he said.

“Important areas of concentration include making large infrastructure expenditures to improve efficiency, such as building multimodal logistics parks and designated freight corridors. For enhanced operations and transparency, embracing technology like AI and IoT needs incentives,” iThink Logistics Co-founder Zaiba Sarang said.

Streamlining the GST system and encouraging sustainability by using electric cars and other eco-friendly activities is also essential.

Innovation and growth will also be fuelled by assistance for SMEs, startups, and skill development as well as by encouraging public-private collaborations and streamlining regulatory procedures, she said.

“By addressing these issues, the industry will contribute more to India’s economic development,” Ms. Sarang added.

More tax benefits for health insurance under the new tax regime, relaxation in payment norms for MSMEs and incentives for the agri-tech sector are among the expectations of stakeholders from the first budget of the Modi 3.0 government.

Finance Minister Nirmala Sitharaman is scheduled to present the full Budget for fiscal 2024-25 on July 23, which will be the first major policy document of the new government.

Click here for more 2024-25 Budget related updates

Anup Rau, Managing Director and Chief Executive Officer of Future Generali India Insurance Company, said the deduction limit on health insurance premiums under Section 80D of the Income Tax Act has remained unchanged for the past nine years despite the fact that there has been a significant rise in healthcare costs across the country.

“It would be best if the limit for medical insurance is linked to inflation and gets revised automatically every year or once in a couple of years. Also, the benefits need to be extended to the New Tax regime since increasing health insurance penetration is critical. So, we hope the upcoming Budget to announce some hike in the deduction limit on health insurance premiums,” Rau said.

Tapan Singhel, MD & CEO of Bajaj Allianz General Insurance, said reforms like offering health insurance to employees at negotiated rates, reducing GST on health insurance premiums, and offering tax benefits like increased Section 80D exemption limits would make health insurance more affordable and accessible, especially for the ‘missing middle’ segment of our population.

“Additionally, for senior citizens, removing the limit on deductions for health insurance premiums would significantly ease their financial burden,” Mr. Singhel said.

The Finance Minister is likely to lay out the government’s economic agenda in the budget.

On expectations from the Ms. Sitharaman’s budget, D S Negi, CEO of Rajiv Gandhi Cancer Institute & Research Centre (RGCIRC), said the focus on reforming cancer care in India is crucial and it is important to prioritise funding for advanced treatments like immunotherapy and personalised medicine, ensuring more patients can access these cutting-edge therapies.

“Extending Ayushman Bharat to those aged above 70 years will be highly beneficial for senior citizens. However, the current coverage limit of ₹5 lakh may not be sufficient for critical illnesses such as cancer, where treatment costs can range from ₹15-20 lakh.

“Therefore, it is essential to consider increasing the coverage limit for critical illnesses like cancer to ensure adequate financial support for cancer patients,” Mr. Negi added.

The budget is likely to include steps to fast-rack reforms to make India a USD 5-trillion economy in the near future and turn the country into a ‘Viksit Bharat’ by 2047.

Ahead of the budget, Chairman of the Medical Technology Association of India (MTaI) Pavan Choudary said that customs duties and taxes levied on medical devices in India are one of the highest in the world which directly impacts patient affordability.

“On the other hand, countries like Singapore, Hong Kong, Italy, and Norway impose no such duties. Australia and Japan levy only a minimal 0.5 per cent duty, while in the United States, it stands at 2 per cent, and in China at 3 per cent.

“This stark contrast creates risk for illegal imports of medical devices in India that are not backed by legal and service guarantees. Furthermore, such trade would undercut the Indian government’s tariff revenue,” he said.

Vivek Jalan, Partner at Tax Connect Advisory Services LLP, said as per recommendations of Micro, Small & Medium Enterprises (MSMEs), Section 43B(h) in the Income Tax Act was introduced from AY 24-25. However, the alignment of the disallowance for payables under sections 43B(h) of the Act has been made with the MSME Act, which requires that payment has to be made to an SME within a maximum of 45 days.

“This is difficult in the present-day trade where a 60-90 days credit period is the norm.

“In this budget, it is expected that this provision will be relaxed/amended aligning the same with the CGST Act w.r.t. disallowance when payment to SMEs is not made within 180 days. Hence, in case a taxpayer does not pay an SME within 180 days, then the expense may be added back to his income,” he said.

In anticipation of the budget, Saurabh Rai, CEO of Arahas, has expressed high expectations for substantial investments in sustainability and geospatial technology.

“We anticipate significant allocations towards renewable energy projects and incentives for companies embracing green technologies,” he said.

Additionally, Rai said that boosting agri-tech innovations, providing tax incentives for tech companies and investing in human capital development is imperative for driving sustainable growth.

Sanjay Kumar, Founder and CEO of Geospatial World, said that to fully leverage the power of digital twin technology, it is crucial to allocate dedicated funds to it in the Union Budget.

“This allocation will facilitate the widespread adoption of digital twins, driving efficiency gains, cost savings, and improved decision-making in infrastructure projects. By investing in this technology, India can achieve significant long-term benefits, such as enhanced asset management, reduced downtime, and increased resilience to environmental challenges,” Mr. Kumar said.

Ms. Sitharaman was given charge of the finance portfolio in the second stint of the Modi government after the 2019 general elections, becoming the first full-time woman Finance Minister in independent India.

Prime Minister Narendra Modi during the presentation of the Interim Budget 2024 in the Lok Sabha, at Parliament House in New Delhi, Thursday, Feb. 1, 2024.
| Photo Credit: PTI

Prime Minister Narendra Modi characterised the Interim Budget tabled on Thursday as “inclusive and innovative”, one that “carries the confidence of continuity”, a reference to Finance Minister Nirmala Sitharaman’s assertion in Parliament that it will be yet another Modi-led government that will present the full Budget in July after the Lok Sabha election.

Budget 2024 live updates | Interim budget leaves tax structure untouched; PM calls it ‘transformative’ for India’s future

“This Budget will empower all pillars of developed India — the youth, the poor, women, and farmers. It carries the guarantee of strengthening the foundations of Viksit Bharat by 2047,” he said in remarks made directly after the tabling of the Union Budget.

On Wednesday, the start of the Budget Session, Mr. Modi had, in his customary remarks, said that the Interim Budget will not have any major announcements but broad guidelines for the future, and the Budget speech on Thursday reflected that.

Stating that the Budget reflected the aspirations of “young India”, he highlighted two significant announcements in the Budget — that of a fund of ₹1 lakh crore for research and innovations, and the extension of tax exemptions for start-ups.

“We set a big goal, achieve it, and then set an even better goal for ourselves,” he said, referring to the target to build two crore more houses for the poor under the Pradhan Mantri Awas Yojana, and create three crore ‘Lakhapati Didis’ as part of women’s empowerment.

He added that keeping the fiscal deficit under control at a time when the total expenditure had seen a historic rise to ₹11,11,111 crore in this Budget was “in the parlance of economists, hitting a sweet spot”.

“It will create millions of new employment opportunities for the youth along with the creation of modern infrastructure of the 21st century,” Mr. Modi said. He singled out measures taken by his government for the poor and the middle class, including the Pradhan Mantri Suryodaya Yojana, the roof-top solar campaign where one crore families are to avail free electricity while also have the potential to earn ₹15,000-18,000 annually by selling excess electricity to the government.

He made a special mention of the tax remission scheme announced in Thursday’s Budget speech that is expected to provide relief for one crore tax payers caught up in disputes with tax authorities over petty amounts from as far back as the 1960s, stating that this too would give relief to the middle class.

Union Finance Minister Nirmala Sitharaman leaves after briefing the Bharatiya Janata Party (BJP) MPs on the Union Budget 2023-24, at Parliament House, in New Delhi on Friday.
| Photo Credit: ANI

BJP MPs on Friday interacted with Union Finance Minister Nirmala Sitharaman on the merits and demerits of the new and old income tax regimes at a briefing here on the Union Budget, which was tabled in Parliament on Wednesday.

Members from both the Lok Sabha and the Rajya Sabha were present at the briefing on the Budget, the last full one before the 2024 Lok Sabha elections, and for which the BJP has drawn up a massive outreach programme explaining the main highlights.

“There was a power point presentation on the Budget and its highlights, but the Finance Minister went into great detail about the new and old income tax schemes, and the changed slabs. Tax issues always require this kind of explanations, they are never easy, and many MPs had queries on the relative merits and demerits,” said a BJP MP present at the meeting.

There were also questions on the slashing of allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) compared with the past few years. The Budget allocated ₹60,000 crore for the MGNREGS, which is 18% lower than the Budget Estimates of ₹73,000 crore for the current year, and 33% lower than the Revised Estimates of ₹89,000 crore for the scheme.

“On this, the Finance Minister said that the the hiked allocations for the Pradhan Mantri Awas Yojana, up 66% in this Budget, especially for tier two and three cities will make up for creation of similar employment. She said that during COVID-19 there were situations for increasing the allocations, and that the scheme is largely demand-driven,” the source said.

The capital expenditure detailed in the Budget was also gone into in detail, and flagged as something that the BJP MPs should speak about when talking about the Budget. The Mahila Samman Patra, a small savings instrument for women with interest rate up to 7.5% for deposits of up to ₹2 lakhs was also talked about.

The BJP kicked off its outreach programme on the Budget on Friday, with Chief Ministers of the States ruled by the party holding press conferences. As part of the programme, Union Ministers will also fan out to the State capitals to talk about the highlights of the Budget.

Prime Minister Narendra Modi addressed the media at Parliament House on the first day of the Union Budget session of Parliament
| Photo Credit: Shiv Kumar Pushpakar

Prime Minister Narendra Modi on February 1 termed the Union Budget as the “first budget of Amrit Kaal” (the 25-year period between the 75th year of independence and its centenary) and said that it would lay a strong foundation for building a developed India.

“The first budget of Amrit Kaal will build a strong foundation for building a developed India. It gives priority to the deprived. This Budget will fulfil the dreams of an aspirational society including poor people, middle-class people, and farmers. I congratulate Nirmala Sitharaman and her team for this historic budget,” Prime Minister Modi said in a televised address after the presentation of the Union budget.

Also Read | Budget 2023 | Income tax rejig signals BJP’s return to core middle class support base close to 2024 polls

The Prime Minister called the middle class a big force to fulfil dreams of prosperous, developed India and said his government has taken many decisions to empower them. The Budget for this year rejigs tax slabs and exempts those with an income of ₹7 lakh per annum (up from ₹5 lakh per annum in the past) from paying personal income tax and also brings down the effective rate of tax for the higher tax brackets as well.

He hailed the unprecedented investment of ₹10 lakh crore in infrastructure and said it will give speed and new energy to development. Noting that PM Vishvakarma Kaushal Samman will bring a huge change in the lives of “Vishvakarmas,” the Prime Minister said that for the first time schemes relating to their support has been incorporated into the budget.

“Those toiling traditionally through their hands for the country, ‘Vishvakarmas’ are the creators of this country. For the first time scheme related to training and support for ‘Vishvakarma’ has been brought into the budget. Preparations have been made for their training, technology, credit and market support. PM Vishvakarma Kaushal Samman means PM Vikas will bring about a huge change in the lives of crores of Vishwakarma,” the Prime Minister said.

Prime Minister Modi underlined the government’s efforts to enhance the lives of women. “The government has taken several steps to make the lives of women, in rural and urban areas, easy. Women’s self-help groups will further enhance them. Special savings scheme will be started empowering women in households,” the Prime Minister said.