Union Budget 2024-25: Anticipations high as government prepares transformative reforms

The Union government is set to unveil the Budget 2024-25 in Parliament. Finance Minister Nirmala Sitharaman will present the budget to the Lok Sabha on July 23 at 11:00 am. This critical economic document for the Modi 3.0 government aims to chart a course for India’s development as a developed nation by 2047. Extensive consultations with various stakeholders and industry experts have taken place, with Prime Minister Narendra Modi recently holding a high-level meeting with economists to gather suggestions.

Gold and Commodity Market Expectations

The gold and commodity market is eagerly anticipating changes. Market experts expect an import duty cut on gold from 15% to 10% and for silver to be at par with gold under the Comprehensive Economic Partnership Agreement (CEPA). There is also an expectation to stop import duty benefits from Least Developed Countries (LDCs) and Free Trade Agreement (FTA) countries to ensure fair competition.

Sachin Kothari, Director of Augmont – Gold For All, highlighted that with the India International Bullion Exchange (IIBX) at GIFT city emerging as a gateway to import bullion, all gold import and export should happen through IIBX, with a unique benefit of 0.5% for importing gold. Market participants also favour the establishment of a Jewellery Export Center at GIFT City and a single regulator for the regulated gems and jewellery market.

Further, the popularity of Sovereign Gold Bonds (SGBs) has led to calls for the interest income on SGBs to be tax-free to attract more investors. Other market expectations include:

• Establishing GST bonded warehouses.
• Mandatory hallmarking across India for all jewellers.
• Permitting EMI on jewellery purchases.
• Allowing lending and borrowing through commodity exchanges.

Modern Retail Tech Expectations

The retail sector anticipates crucial measures to sustain consumption momentum, particularly in rural areas. Sameer Gandotra, Founder & CEO of Frendy, emphasized the need for increased agricultural and rural development initiatives to boost income levels and consumer spending. He also hopes for clarity on formulating the National Retail Policy, which could be a game-changer. Affordable and low-interest credit, stable tax rates for staples, and a push for digitization are key expectations to continue the consumption wave in the Indian retail space.

Focus Areas for 2024-25 Budget

Prof. Rajita Kulkarni, President of Sri Sri University, highlighted that the upcoming budget must prioritize infrastructure development, digital transformation, and robust support for the MSME sector, which forms the backbone of the economy. Creating a favourable environment for foreign investment and simplifying regulatory compliances are crucial for sustained progress. Additionally, measures to enhance financial inclusion and address socioeconomic disparities are imperative. A balanced and inclusive budget focusing on long-term growth while tackling immediate economic challenges is pivotal for India's future trajectory.

Pre-Budget Insights: Education Sector

Vishal Khurma, CEO of Woxsen University, expressed expectations for the education sector. He suggested that the new budget should encourage corporations to allocate a minimum percentage of their annual CSR spending towards building research infrastructure, incubation facilities, and research funding at public and private universities. Encouraging merit scholarships for underprivileged students, particularly female students, can enhance affordability and access to quality education. Implementing uniform taxation norms for home-grown and foreign institutions establishing campuses in India can ensure a level playing field. A renewed focus on skill development programs run by universities, with grants and subsidies to scale up these initiatives, is crucial for high school dropouts and diploma students.

As we approach the announcement of the Union Budget 2024-25, expectations are high for transformative reforms and strategic investments to drive India's economic growth.