July 8, 2024- Finance Minister Nirmala Sitharaman is gearing up to unveil the Union Budget for the fiscal year 2024-25 on July 23. As the first major economic statement under the new Narendra Modi government, the budget is anticipated to focus on revitalizing sluggish consumption through potential adjustments in indirect tax rates.
Amid India’s robust GDP growth, the budget is expected to prioritize infrastructure development, particularly in sectors such as railways, renewable energy, and defence. There is widespread anticipation regarding potential increases in the standard deduction limit for income tax, aimed at providing relief to salaried taxpayers.
Industry stakeholders are closely watching how the government will chart its course towards strategic growth and sustainable development in this crucial economic period.
Union Budget Expectations From Industry Experts
Smita Shetty Kapoor, CEO & Co-Founder, Kelp.
“As we approach the Union Budget 2024, the HR sector has high hopes for impactful reforms that will foster a more inclusive and equitable workplace environment in India. Here are the key areas we believe should be addressed:
1. Tax Reductions on Employment Services: Lowering the GST on employment services from 18% to 5% could create more jobs and increase youth employment, bringing more workers into the formal economy and providing them with essential benefits like Provident Fund (PF) and Employees’ State Insurance (ESI).
2. Streamlining PF Contributions: Reducing the monthly PF contribution from 12% to 5% would increase employees’ disposable income, alleviating some financial pressures amidst rising inflation and living costs.
3. Delayed Remittance Clause: Considering the waiver of penalties for delayed statutory payments due to delays from the principal employer would greatly benefit staffing service providers, ensuring smoother operations and compliance.
4. Enhancing Disposable Income: Significant tax relief for the middle class, including reassessing House Rent Allowance (HRA) to reflect current rental trends, increasing standard deductions, and enhancing exemptions under sections like 80C, 80D, and 80EEA, would provide much-needed financial relief.
5. Investment in Skill Development: The government should increase investment in skill development programs, especially in sectors facing a talent shortage, such as manufacturing and logistics. This would ensure a ready-to-deploy workforce and support economic growth.
6. Support for ESOPs: For start-ups, ESOPs are crucial for attracting and retaining talent. We recommend that these should not be taxed upon exercise, but rather on the final sale of shares, making them a more viable incentive for employees.
7. Policy Support for Diversity and Inclusion: Continued focus on diversity, equity, and inclusion initiatives is essential. Policies that promote safe and respectful workplaces and support for PoSH compliance are critical for creating a positive work environment.
8. Strengthening the Employee Assistance Program (EAP): Enhancing the EAP to support employees’ mental and emotional well-being will be vital in fostering a holistic and supportive work culture. Integrating national mental health initiatives by the Government of India to reduce the stigma around mental health is crucial in fostering a more inclusive and supportive work culture.
9. Encourage participation of women in the workforce with a non taxable childcare allowance.”
Mr. Apurv Modi, Managing Director & Co-Founder of ATechnos Group.
“As we approach Budget 2024, we are optimistic about the anticipated reforms and their potential impact on the mar-tech sector. The expected income tax rate cuts and the proposed increase in the income threshold to ₹5 lakh are promising developments. These measures will enhance disposable income, stimulate consumer spending, and drive growth across industries, including mar-tech.
With the Modi Government starting its newly re-elected term, there is considerable anticipation for policies that further technological innovation and digital transformation. We hope to see initiatives that simplify the ease of doing business and support the growth of digital infrastructure. Such steps will create a robust environment for mar-tech companies to innovate and expand, ultimately contributing to the broader digital economy.Budget 2024 has the potential to be a pivotal moment for the industry, and we look forward to the positive changes it may bring.”