Modi Government 3.0 Finance Minister Nirmala Sitharaman will present the first budget of the country on July 23. Different sectors have different expectations from the Finance Minister in this budget. Everyone is hopeful that something will definitely come out of the Finance Minister’s box for them. The big reason for the increased expectations this time is that the performance of the Indian economy is excellent. The government has no shortage of funds. In such a situation, industry experts are hopeful that the Finance Minister will present a budget that promotes development by taking care of all sectors. Let us know what each sector expects from the budget.
GST on online games expected to be reduced
Amrit Kiran Singh, Founder President of Online Games Institute (SOGI) said that the increase in GST on online games has created a huge tax gap which is giving a huge Indian market to foreign (mainly Chinese) companies at the expense of 500 million Indian companies. Hopefully the Finance Minister will remove this anomaly in the budget. She will give relief to this sector by first announcing a thorough study of the pros and cons of this industry and then determining the appropriate level of taxation.
Emphasis will be on employment generation
Arvinder Singh Nanda, Senior Vice President, Master Capital Services Ltd, said that the fiscal deficit target for FY25 is likely to be 5.1% of GDP as per the interim budget. The emphasis will be on employment generation through capital expenditure and targeted social expenditure as well as the ‘Develop India’ initiative. The budget may also outline a roadmap for fiscal consolidation beyond FY26. While no reduction in personal income tax rates is expected. There may be tax relief for middle-income taxpayers. The budget is expected to focus on agriculture, start-ups, housing, railways, defence, electronics and renewable energy.
There will be emphasis on these sectors in the budget
Sunil Nyati, Managing Director, Swastika Investmart, said the upcoming budget will focus on economic reforms, with more spending expected on capital expenditure and infrastructure while maintaining fiscal discipline. This is facilitated by the government’s increased fiscal space, thanks to the substantial dividend from the RBI and strong GST collection numbers. The focus will remain on the green energy sector, defence, railways, housing and manufacturing sectors. Additionally, measures targeting the rural sector, such as rural infrastructure development and agricultural support, will be emphasized.
To boost consumption in the economy, we can expect some relief for the middle class in terms of income tax. Investment sentiment is currently very strong, and it is important for the government to avoid decisions like hikes in LTCG or STT, which can spoil the market mood.
Government can give relief in income tax
According to Shyam Prasad, CEO, Brand Studio Lifestyle, as we approach the upcoming budget announcement, we expect the government to focus on boosting disposable income, especially for the salaried class, through tax benefits and dedicated rural community initiatives. The fashion segment is dynamic and highly sensitive to changes in consumer behaviour, economic policies and market trends. We expect the government to prioritise initiatives and investments to stimulate consumer spending, and also align with ongoing infrastructure development initiatives. Moreover, the rise in rural spending provides a great opportunity to expand the consumer base in e-commerce, helping it grow and reach more people.
Real estate also has many expectations
According to Mohit Goyal, Managing Director, Omaxe Limited, the real estate sector is one of the strongest pillars of the Indian economy. As its contribution to India’s GDP is set to reach 13% next year, we hope that the upcoming budget will further drive the growth of the sector. Also, granting industry status to the real estate sector has been one of the most sought-after demands. This will allow developers to take loans at relatively lower interest rates and avail tax incentives. We urge the government to look into this and take beneficial steps to further strengthen the sector.
Nayan Raheja of Raheja Developers said that the real estate sector is hopeful that the government will take some policy initiatives in the upcoming budget. There are long pending demands like industry status and single-window clearance, and we hope for positive action on these. There is also a demand to increase the deduction limit for housing loan principal repayment under section 80C from the current Rs 1,50,000. We hope that the budget announcements will further boost the prospects of the sector and increase its share in the country’s economy.
According to Rajat Goyal, Managing Director, MRG Group, one of the key expectations of the real estate sector from the upcoming budget is the granting of industry status. It is the second largest employment provider in the country. Ahead of the Union Budget 2024-25, the key expectations of the sector include granting of industry status and single window clearance system. The sector is hoping for the implementation of the single window clearance system and more support for affordable housing initiatives.
Kushagra Ansal, Director, Ansal Housing said, “With the real estate sector’s contribution to India’s GDP estimated to reach 13% of India’s GDP next year, the sector is hoping that the current budget will provide a push to propel its growth even further. Reduction in input costs is a major concern. The declining share of affordable housing and its huge demand is another challenging sector. The sector requires immediate intervention. Tax incentives for investors with favourable provisions under capital gains tax and concessions for first-time homebuyers are some of the other initiatives the sector would like the government to consider.”
Ashwini Kumar of Pyramid Infratech said, despite the positive sentiments around the industry, challenges remain. The real estate sector is price sensitive and taxes on input items like cement and steel are still increasing the construction cost of the project. We request the government to look into this and also hope for single window clearance. Real estate is one of the largest employers in the country and any beneficial move for the sector will have a cascading effect on the entire economy.
Mohit Jain, Managing Director of Krishumi Corporation, said that this is a welcome decision of the Reserve Bank of India to not change the interest rates with the aim of controlling inflation. This will lead to stability in the EMI along with stability in the bank’s home loan rates. This is a good news for the housing market. Due to this, the boom in the sale of properties of all segments including affordable housing, mid-range and luxury housing will continue in the coming days.
Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd. said, Reserve Bank of India’s (RBI) decision to maintain status quo in repo rate is expected and as expected. This will stabilize inflation as well as encourage financial activities. This status quo is good for both borrowers and developers. Stable interest rates will benefit potential buyers, which will increase demand. The increase in demand will accelerate the growth of the real estate sector, which will ultimately make a valuable contribution to the country’s GDP.
Vikash Aggarwal, COO, Worldwide Realty, said, “As the Union Budget approaches, we expect significant allocations for infrastructure development to boost connectivity and economic growth. A strong focus on affordable housing is important, as it addresses the urgent need for quality living spaces for the masses. Enhancing the PMAY scheme and increasing tax relief for first-time homebuyers will boost demand and make home ownership more accessible. Investment in sustainable and smart city projects should be prioritised to align with urbanisation trends and environmental goals. These measures will accelerate real estate growth and contribute to the overall socio-economic development of the country.”
Anuj Munot, CEO and Founder, Urbanwork, said that the Union Budget 2024 is a pivotal moment for the Indian real estate sector, which has shown strong performance over the last few quarters. We expect significant reforms that will streamline processes, increase transparency, and drive growth. As Niti Aayog estimates the market size of the sector to reach $1 trillion by 2030, it is important for the government to address key issues such as high input costs of essential materials such as steel and cement. Reducing the 28% GST on cement and providing industry status to real estate can reduce construction costs and enable developers to access loans at lower interest rates. Additionally, implementing a single-window clearance system will speed up project approvals and promote a more efficient and investor-friendly environment. These measures will not only boost growth but also contribute significantly to the country’s GDP, increasing the sector’s contribution from 8% to 13% by 2025. Furthermore, encouraging sustainable practices and increasing transparency will further strengthen the sector’s contribution to the national economy and improve the livelihoods of countless individuals.”
The budget will increase the demand for jewellery
PNG Jewelers Chairman and Director Dr. Saurabh Gadgil said, the budget is expected to provide many relief to the common people as well as tax concessions to boost the industries. With a stable government focused on economic reforms at the Center, we expect many relief measures to be announced, which will boost the retail industry and increase the purchase of jewelery and gold products.
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