P.B. Balaji, Group CFO, Tata Motors
The Union Finance Minister has delivered a growth-oriented budget that reaffirms the government’s commitment to attain the larger purpose of ‘Viksit Bharat’, with progressive policies to step up domestic consumption while driving long-term transformation.
Union Budget 2025 industry reactions highlights
The single most important highlight of this Budget is the increase in income tax exemption to ₹12 lakh, which will raise disposable income, particularly benefiting the middle class. Apart from spurring consumption, this move is also a message to the larger population that the benefit of a larger tax base and better compliance is lower taxes for everybody. This augurs well for the future.
Fiscal consolidation focus
Additionally, the fast-growing medium, small, and micro enterprise (MSME) sector has been given priority through measures such as enhancing credit guarantee cover and increasing investment and turnover limits which provides continuity in long term policy. Banking on domestic consumption is a prudent strategy to cope with rising global challenges.
The Budget sets a revised fiscal deficit target of 4.8% of GDP for 2024-25, with an ambitious goal of 4.4% for next year. This continued focus on fiscal consolidation ensures that inflation remains in check and investors continue to support the prudent growth story of the country. Keeping inflation in check is important to ensure that the gains on tax savings are not wiped out by rising costs.
Record capex allocation
The Budget has allocated a record ₹11.2 lakh crore towards capital expenditure. This substantial outlay will strengthen India’s infrastructure development and also stimulate private-sector investment. Additionally, the ₹1.5 lakh crore in 50-year interest-free loans to States will catalyze vital infrastructure development across the country reinforcing the government’s commitment to robust public investment for economic expansion.
A dedicated Nuclear Energy Mission with ₹20,000 crore investment for research and development in small modular reactors underscores the government’s commitment to sustainable energy. Moreover, the removal of customs duties on battery manufacturing equipment, cobalt powder, and lithium-ion battery waste will accelerate the growth of India’s electric vehicle sector. This policy aims to foster a self-reliant, green economy by incentivising domestic production and attracting investments in the electric mobility ecosystem.
Building the talent pool
Recognising that India’s growth will be driven by a skilled workforce, the Budget emphasises initiatives to enhance skill development. The establishment of five National Centres of Excellence for skilling, along with partnerships for global expertise, will equip India’s workforce for the “Make for India, Make for the World” manufacturing initiative. Additionally, the expansion of the capacities of the Indian Institutes of Technology and the creation of a Centre of Excellence in Artificial Intelligence are vital steps to address the evolving demands of the global technology and innovation landscape.
In conclusion, this Budget responds to the challenges faced by the economy and doubles down on the potential offered by India whilst continuing to invest in long-term imperatives.
Published – February 02, 2025 12:25 am IST
