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India’s Union Budget 2024–2025 confirms priorities of government’s 5-year term

October 10, 2024 / 7 min read

The Indian government has enacted its Union Budget 2024, outlining steps it will take in the next few years to work toward the goal of “Viksit Bharat,” or “Developed India,” by 2047.

The Indian government has enacted its Union Budget 2024. The Union Budget 2024 takes significant steps to address issues and promote sustainable economic development toward the goal of Viksit Bharat, or “Developed India,” by 2047. This long-term initiative focuses on improving India’s status as a developed nation by empowering farmers, women, youth, and the poor. The Union Budget aims to advance the nation toward the long-term goal via nine key priorities, such as:

The Union Budget aims to advance the nation toward the long-term goal via nine key priorities.

Some of the most important initiatives that will be funded under this budget include:

Infrastructure development

The investment toward infrastructure development is expected to equal 3.4% of 2025 GDP or 11 trillion rupees (about $131.5 billion). Private sector infrastructure investment will be encouraged by viability gap funding as well as supportive laws and regulations.

Ease of doing business

The budget attempts to make it easier for businesses to start up and grow in the country. Building on the success of 2023’s Jan Vishwas, or “Amendment of Provisions” Bill, a Jan Vishwas Bill 2.0 is now under development by the government. The federal budget also provides incentives to states for increased digitalization and the execution of their Business Reforms Action Plans.

Employment and skilling

The government plans to increase the employment and productivity of its workforce through the following key initiatives:

Promoting manufacturing

The Indian government plans to provide impetus to the manufacturing sector by announcing new credit eligibility assessment models and a credit guarantee program as support measures for micro, small, and medium enterprises (MSMEs). Twelve industrial parks will be approved for the National Industrial Corridor Development Program. “Cities as Growth Hubs” will be developed, particularly emphasizing transit-oriented advancement.

Promoting foreign direct investment (FDI)

The government has recommended coordination with the Reserve Bank of India to simplify current foreign direct investment and overseas investment rules and regulations in ways that would:

The government has recommended coordination with the Reserve Bank of India to simplify current foreign direct investment and overseas investment rules.

Research and innovation activities

The Indian government plans to incorporate the Anusandhan National Research Fund (ANRF) to support fundamental research and prototype development activities. The ANRF aims to seed, grow, and promote research and development (R&D) and foster a culture of research and innovation throughout India’s universities, colleges, research institutions, and R&D laboratories.

In addition, per the announcement in the interim budget, the Indian government would establish a system with a funding pool of 1 trillion rupees (about $11.9 billion) to support private sector-driven research and innovation at the commercial level. A dedicated venture capital fund worth 0.01 trillion rupees has also been launched to grow the nation’s space economy five times over the next 10 years.

Tax developments

The Union Budget includes a significant number of tax developments such as:

The Union Budget includes a significant number of tax developments.

Next steps for businesses operating in India

The budget has been passed and enacted as a bill after receiving the President of India’s consent on Aug. 16, 2024. Businesses with operations or interests in India should consult with their advisors to learn more about how the provisions could affect those operations and to find out what opportunities may exist for growth in the new programs that are outlined. Those who have been considering creating a presence in India should seek advice on whether any of these budget provisions would make expansion into the country more or less desirable.

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