As I reflect on the announcements in the Union Budget 2024, I am pleasantly surprised with how well the Budget has focussed on sustainable long-term growth that ties with the agenda of Viksit Bharat. The areas that stood out for me included:

India’s demographic dividend is both its greatest strength and its biggest challenge. Budget 2024 introduced innovative schemes such as fiscal incentives for first-time employees, internship programmes supported through CSR funding, education loans with subsidised interest rates, and ITI upgrades.

Consistent focus on tech

This is the seventh Budget presented by the Finance Minister, and across all seven, the importance of technology and digitalisation has been consistently emphasised. India’s Digital Public Infrastructure has already contributed a 1 per cent value add to the GDP. The Budget expanded the focus on DPI to sectors like agriculture, credit, e-commerce, education, health, law and justice, logistics, MSMEs, service delivery, and urban governance. Notably, the Budget also incentivised States to pursue their digitalisation projects and announced that all remaining services under customs and income tax would be digitised.

Supporting innovation

The removal of the angel tax should spur more domestic investments. Additionally, the focus on space tech, with plans to expand the sector five-fold and a dedicated ₹1,000-crore VC fund, will drive significant innovation and growth. The FM’s emphasis on regulatory support for MSMEs, including credit guarantee schemes, a self-financing guarantee fund, a new assessment model based on digital footprints, and credit support during stress periods, will also bolster sustainability for MSMEs.

Innovate in India

India has become a hub for Global Capability Centres (GCCs). And as global enterprises struggle with the balance of cost optimisation, innovation readiness and access to talent, setting up a technology centre in India is emerging as a preferred option. India attracts 50-70 new GCCs every year and there is significant potential to double this number. Nasscom has advocated for streamlining transfer pricing processes and expanding safe harbour policies, and the FM’s announcement to address these will likely increase foreign investment. Changes to TCS on ESOPs and lowering the tax rate on foreign companies will also create a positive investment climate.

One area that was mentioned in the Budget but requires quicker action is the focus on R&D. The government has announced the ₹1 lakh crore NRF project, but progress has been slow. Similarly, a deep tech policy for start-ups has been proposed but not yet implemented. India’s journey to Viksit Bharat necessitates R&D as a central pillar, increasing from the current 0.6 per cent of GDP to at least 2-3 per cent over the next decade.

In conclusion, the Budget has laid a strong foundation for sustainable long-term growth.

Nasscom has advocated for streamlining transfer pricing processes and expanding safe harbour policies. The FM’s announcement to address these will likely increase foreign investment

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