NEW DELHI/JAMMU: As the Union Budget 2024 approaches, leaders across various industries have shared their insights and expectations, highlighting key areas for growth and development.
Mr. Sanjay Dighe, CEO & Director of Krystal Integrated Service Ltd
The budget this year has the power to significantly impact the services sector, and we expect it will prioritize growth initiatives in the sector. The sector needs streamlining of regulations and reduction of compliance burden.
The GST tribunals need immediate operationalization. They are crucial to efficient resolution of backlog of GST-related disputes.
There is clarity required on tax exemptions for services provided to government entities, particularly in healthcare sector. At a practical level, the point of taxation for manpower and security services needs to be changed from a billing system to a receipt-based system. This would significantly enhance cash flow management for services companies and align their taxation with actual revenue received. While the GST Council typically takes decisions on such matters, we hope the central government will consider these concerns in the upcoming Union Budget.
Mr. Madhavan Menon, Executive Chairman, Thomas Cook (India) Limited (Thomas Cook, SOTC, Sterling Holidays and TCI)
The Travel & Tourism sector represents a vital economic driver: The World Travel & Tourism Council (WTTC) 2024 projects that Travel & Tourism will contribute almost INR 21.15 trillion to the India’s GDP in 2024, a marked 21% above 2019 levels. With jobs predicted to increase by 2.45Mn this year, this represents one in every 11 jobs in the Country.
India’s Travel & Tourism sector represents a strong force multiplier - across allied sectors, employment generation and foreign exchange receipts. Our expectations from the Union Budget include key pivots to transform India into a destination of choice:
Infrastructural Focus: As a key fundamental for the sector, setting up of new airports via private participation must become a priority – thus creating a viable hub & spoke model; also rapid expansion in rail, road and waterways (sea and river cruises). Additionally, infrastructure development for high growth areas like religious circuits and underleveraged hidden gems (Lakshadweep).
Inbound Tourism: revival of the Inbound incentive scheme – but for select destinations.
Tax:
- Reduced Income tax levels to provide increased disposable income in the hands of the people – a boost for travel & tourism spends
- LTA exemption annually, against twice in 4 years to catalyse domestic tourism
- We would recommend lowering of TCS to 1%. If not, a standardisation at 5% on foreign travel packages (against the current 5% and 20% slabs).
- Clarification on applicability of Section 194O on E-commerce: This defeats the government’s focus on digital India and ease of doing business.
- Section 53 of GST should exempt travel agents. There is no revenue loss for the Government, as airlines are already discharging tax on their sale.
- Clarity wrt TCS on Forex card payments
GST is a key area and our wish list for Budget 2024-25 includes:
o Allow GST input credit facility for inbound and domestic tourism
o Centralise similar issues faced by a single assessee in multiple states – reducing unwarranted time, efforts and litigations in multiple jurisdictions
o Simplify the compliance mechanism in filing reports, reconciliations, audits
Additionally:
- For technical matters, amendments and interpretation: we would recommend a collaborative approach between the authorities and tourism stakeholders towards better understanding and compliance.
"The real estate sector has been burdened with multiple and double GST taxation, which needs to be streamlined to a one-time transaction. We expect the government to establish a monitoring cell to ensure that the cost of construction does not increase moving forward. Additionally, we urge the government to reduce the GST rate on cement from 28% to 18%, as it is not a sin category product. These measures will greatly support the growth and stability of the real estate sector." Mr, Ashok Chhajer, Chairman and Managing Director, Arihant Superstructures Ltd.
"Urban centers face escalating costs due to increasing demand. To address this, strategic urban planning is essential. We urge the government to prioritize the development of satellite towns alongside a comprehensive infrastructure roadmap. This approach will alleviate pressure on major cities while simultaneously creating new employment opportunities in these emerging areas. Promoting green infrastructure, with a strong focus on achieving zero-carbon emissions, is critical. Budget allocations should reflect these principles, not only meeting the growing demand for sustainable living spaces but also positioning India as a leader in ethical real estate development.
The lengthy approval process, often exceeding a year, creates a major hurdle for developers. Granting industry status to the real estate sector by the RBI is crucial for growth. A unified, single-window system will expedite approvals, reducing interest rates and construction costs, ultimately making financing more accessible for builders. Reducing the Goods and Services Tax (GST) will significantly lower the cost of homes and contribute to the overall growth of the sector. By aligning sustainability incentives, industry status, and revised GST structures, we can accelerate the real estate sector's contribution to GDP from 7% to a projected 13%, thereby exceeding our goal of becoming the world's third-largest economy by 2030." Pavan Kumar, Founder and CEO - White Lotus Group.
"The reinstatement of input tax credit on GST outflows towards cost of developing real estate assets. This would significantly reduce cost and cash flow pressures on developers, thus helping rationalize price increases for buyers."Mayank Ruia, Founder and CEO of MAIA Estates.
Ajinkya Firodia, Managing Director, Kinetic Engineering Ltd, "The government has been very supportive of EV adoption in India over the past few years, providing a significant boost to EV sales, especially in the two-wheeler and three-wheeler segments. In this budget, we hope for long-term assurance of the continuation of schemes and restoration of subsidies to the earlier levels of ₹15,000 to ₹20,000 per kilowatt-hour of battery for a period of 5 to 7 years. This will enable manufacturers to focus on developing advanced and eco-friendly products, thus reducing pollution in the country.
Moreover, while the government has introduced promising schemes for EV manufacturing linked to investment, the current requirement of a ₹100 crore investment over seven years for mega projects is quite high. Reducing this threshold would motivate more players to undertake substantial and innovative projects.
There should be a stronger push for domestic manufacturing of key electronic components like PCBs, battery cells, and motor magnets, which are currently imported. Another crucial aspect is addressing the inverted GST structure, where a 5% GST is charged on the final product but 18% is levied on suppliers, causing cash flow issues for OEMs. Implementing a uniform 5% GST from suppliers to end customers for EV products would make the business more lucrative and allow manufacturers to focus on technology, production, and sales rather than cash flow management. Beyond the EV sector, the government’s continued focus on infrastructure development is commendable, and we look forward to further progress in this area."
Nina Lekhi, MD & Chief Design Curator, Baggit, "Handbags manufacturing is labour intensive and provides employment and livelihoods for many unskilled women. It is also highly competitive with over a hundred brands in the market. There is no sense in wasting precious foreign exchange on large-scale importation of a low-tech, labor-intensive product like handbags. The budget should disincentivise such wasteful importation and support Make in India efforts that provide much-needed employment to unskilled women``
Mr. Nikhil Mansukhani, Director MAN Industries (India) ltd, "As an industry leader focusing on the production of large diameter carbon steel pipes for vital energy infrastructure, MAN Industries is eagerly anticipating the upcoming budget's renewed emphasis on renewable energy. We strongly support policies that promote technological advancements, expand renewable energy projects, and enhance manufacturing capabilities in eco-friendly technologies. A well-structured budget has the potential to attract significant investments in sustainable energy solutions, thereby strengthening India's pursuit of energy security and environmental sustainability. MAN Industries is fully committed to leveraging our expertise to contribute to these efforts and ensure resilient infrastructure to meet the evolving demands of the renewable energy sector."As per reports approx. ₹130 billion has been budgeted for the manufacture of green hydrogen, and ₹44 billion has been set aside for the development of electrolysers. The National Green Hydrogen Mission (NGHM) had ₹6 billion set aside in the FY25 interim budget. On the other hand, we anticipate that this will rise in order to support the establishment of green hydrogen hubs and create a green hydrogen pathway for industries that are challenging to decarbonize.
Arindam Chakraborty, COO, Catering Collective, "The "Wed in India" and “Meet in India” proposition presents a promising opportunity for the wedding industry, encompassing hotels, standalone venues, and planners. As the Budget 2024 approaches, several key points warrant attention to fully capitalize on it:
GST Inputs on Capital Expenditure, Expenses, and F&B Sales:
Currently, F & B business does not receive input credit towards F & B sales or expenses. If would be highly beneficial if input credit towards F & B sales as well as on expenses – both Opex and Capex in nature are considered for our F & B business Currently, F&B is charged at 5% GST, while other wedding-related services (venues, planning, decor, etc.) are charged at 18% GST. Standardizing GST at 5% across all services would significantly boost the wedding industry by making it more accessible and affordable for consumers. This would encourage more people to invest in their weddings, driving industry growth. This would also get a lot of unorganised vendors under the ambit of the GST regime
Infrastructure Improvements in Tier 2 & 3 Cities:
Enhancing connectivity via air and road will encourage exploration of these locations, leading to improvements in hotels and venues infrastructure. These cities definitely have untapped potential. Destination weddings reaching Tier 2 & 3 cities will also allow guests to conduct their family weddings at their place of birth (recent example being the Anant Ambani & Radhika Merchant wedding at Jamnagar), which in turn will help growth of local industries.
The thriving destination wedding industry necessitates enhanced infrastructure. This includes opening more heritage sites/government-owned sites for empanelment for exclusive F & B catering, thereby positioning India as a premier destination for celebrations. Even global state level events could happen at multiple and culturally rich heritage sites spread across the length and breadth of ‘Incredible India’"
Mr. Praveen Jaipuriar, CEO, Continental Coffee Limited
"In the forthcoming Union Budget 2024, we expect initiatives that will promote sustainable and inclusive growth while tackling inflation in the country. According to a consumer industry analysis report, India is one of the largest retail markets in the world, expected to grow to US$1.41 trillion by 2026. Despite the growing purchasing power in the country, there remains a significant disparity between urban and rural consumption patterns. To address this difference in the FMCG sector, the Government can work towards improving infrastructure, promoting employment generation, and increasing financial inclusion. These efforts will help revitalize the economy.
The FMCG sector anticipates the rationalization of GST. Lowering GST on products like packaged foods would not only make goods more affordable but also boost consumption, leading to higher sales volumes. Additionally, the coffee manufacturing Industry expects the government to help boost consumption by adopting measures like lowering the GST on Instant Coffee, decreasing the import duty on green beans, and last but not least, adopting measures to increase green bean acreage and throughput. These strategies will help to produce more coffee beans, both in quantity and quality, to meet market demand and potentially improve the sustainability and profitability of coffee production."
Gaurav Malhotra, Managing Director, hansgrohe India
For the Union budget, we are optimistic about the positive measures that will bolster the luxury real estate sector and enhance the overall market dynamics. This aligns with the growing aspirations towards a luxury lifestyle, where consumers seek high-quality, sophisticated home interior solutions. We urge the government to put a rationalization on GST and reduce home loan interest to stimulate demand and growth for the luxury real estate sector. Additionally, we hope to see initiatives aimed at boosting local manufacturing capacity that can further strengthen the make-in-India initiative and also increase the availability of world-class products in the domestic market. These strategic reforms will collectively contribute to the growth of our industry and enable us to continue delivering innovative solutions that can meet the high standards of luxury and cater to the individuals who are aspiring to live a luxury lifestyle.
Dr Suman Katragadda, CEO, Heaps.ai
"As we gear up for the budget for this year, the focus of the Government shall be on Healthcare access to all. With a sustained focus on Healthcares Access to all, Out-of-Pocket Expenditure (OOPE) in total health expenditure needs to be taken into consideration. According to the National Sample Survey Office (NSSO), the Household Consumption Expenditure Survey of 2022-2023 shows a rise in medical expenses as a percentage of monthly per capita consumption expenditure (MPCE). Hospitalisation expenses increased from 2.15% to 2.31%, and non-hospitalisation expenses rose from 4.5% to 4.66% in rural India between 2011-2012 and 2022-2023.
These data indicate the growing need to improve care management services in India. The government should work to improve care coordination and care management to reduce the risk of hospitalisation and repeat hospitalisation. This will help in reducing the burden of rising healthcare costs on Indian households. Care coordination is crucial because it ensures adherence to prescribed guidelines and treatments, minimising the risk of overutilization while optimising patient outcomes. On the other hand, a prominent challenge faced in healthcare insurance is the pervasive lack of transparency evident in insurance policies and claim processes. Policyholders often need help deciphering the intricate details of insurance contracts, resulting in confusion regarding coverage entitlements and reimbursement procedures. The government of India needs to work toward easing the health insurance claim processing and increasing transparency".
Pratik Kamdar, CEO & Co-Founder Neuron Energy, says that one critical expectation is the revision of GST for entry-level two-wheelers and a uniform 5% GST on all Electric Vehicle (EV) spare parts, which would create a more equitable tax structure, fostering widespread EV adoption. “A cornerstone of our expectations is the unveiling of FAME-III (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles). Learning from the challenges of FAME-I and FAME-II, FAME-III must adopt a cohesive strategy to accelerate EV adoption. Subsidising financing options will make EVs more accessible, and reducing the GST on batteries by 13% could make EVs significantly cheaper, bringing them on par with conventional vehicles,” he adds.
