India unveils incentives to create jobs in first budget after election

(Reuters) -India will spend $24 billion in job-spurring efforts over the next five years and boost rural spending, Finance Minister Nirmala Sitharaman said on Tuesday in the 2024/25 budget, unveiled after last month's election setback for the government.

COMMENTARY:

SANDEEP NAYAK, ED & CEO OF CENTRUM BROKING, RETAIL, MUMBAI

"The triad of welfare spends, capital expenditure and fiscal discipline has been beautifully balanced by the government in this budget. There is a good amount of welfare spend on women-led development, the MSME sector and the agriculture sector covering a large part of the populace."

"Augmenting the welfare spends with an adequate thrust on capital expenditure while containing the fiscal deficit at 4.9% of GDP is a fine balancing act. However, the increase in capital gains tax and securities transaction tax is a dampener for capital markets."

KIRANG GANDHI, FOUNDER OF FP INDIA, PUNE

"The hike in short- and long-term capital gains tax has caused instability in markets."

"While the goal is to raise more revenue, these changes might discourage short-term trading, potentially hurting investor sentiment."

SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM

"The budget successfully engineered a fine balance between supporting job creation and skilling, rural development and agriculture along with continued focus on infrastructure spending without compromising on fiscal consolidation."

"The reduction in the fiscal deficit and commitment to achieving a fiscal deficit below 4.5% by FY26 is positive for India's debt sustainability. The budget announcements are broadly positive for consumption and overall growth."

ANAND RAMANATHAN, PARTNER AND CONSUMER PRODUCTS AND RETAIL SECTOR LEADER, DELOITTE INDIA, BENGALURU

"The budget focuses on important areas such as climate-resistant seed variety distribution, scaling digital public infrastructure and natural farming which will improve farm level productivity."

"Mission for self sufficiency in pulses, encouraging shrimp production and focus on vegetable production clusters will help in aligning production to emerging changes in consumption of fresh produce and proteins."

ANAND RAMANATHAN, PARTNER AND CONSUMER PRODUCTS & RETAIL LEADER, DELOITTE INDIA, BENGALURU

"Focus on e-commerce hubs will help the D2C ecosystem including small vendors and aggregators to bring in greater efficiency in their operations and improve accessibility to markets including exports."

RAJAT MAHAJAN, PARTNER, DELOITTE INDIA, MUMBAI

"Government is incentivising job creation in the manufacturing sector which is likely to impact 30 lakh youth."

"We expect that these additional skilled workers with disposable income in hand will help in driving growth in the automotive industry in the 2 wheeler segment."

NITESH MEHTA, PARTNER, M&A TAX AND REGULATORY SERVICES, BDO INDIA, MUMBAI

"The introduction of Variable Capital Company (VCC) structure for Private Equity could be a game changer for the fund community."

"This structure is prevalent in countries like Singapore and the introduction of VCC coupled with the existing GIFT city structure could certainly bring India a step closer to becoming a financial hub like Singapore."

MADHAVI ARORA, LEAD ECONOMIST, EMKAY GLOBAL, MUMBAI

"As expected, Centre has not let go of the consolidation journey ahead (as the debt management remains tricky), despite the challenges of the political economy."

"The fiscal deficit target has been lower at 4.9% of GDP from 5.1% in the interim budget. The policy direction/prerogatives may remain largely similar, focusing on a credible and clearly communicated consolidation, anchored on stronger revenue mobilization and spending efficiency."

HARSH PARIKH, PARTNER AT KHAITAN & CO, MUMBAI

"Government's plan to implement a policy for rental housing market is a big step to streamline residential renting market and can open doors to many large real estate players including foreign investors to establish large residential complexes and ensure smooth renting."

"Guidance to all states to rationalize stamp duty and to give more benefit for women buyers is also a huge welcome step".

UPASNA BHARDWAJ, CHIEF ECONOMIST KOTAK MAHINDRA BANK, MUMBAI

"The current budget has extended the broad themes from the interim budget focusing on infrastructure, fiscal consolidation, jobs, MSME, rural and agricultural support."

"We expect the bond markets to maintain their euphoria as demand supply dynamics remains very comfortable."

MOIN LADHA, PARTNER AT KHAITAN & CO, MUMBAI

"The budget promises to prioritise strengthening and aiding the MSME sector by introducing credit guarantee schemes, continuing guarantee covers during stress period and developing e-commerce hubs for MSMEs to compete in the global market."

"With India being the hub of global trade, empowering small and medium businesses will be a step towards our mission of continued growth."

SAMIR SHETH, PARTNER & HEAD, DEAL ADVISORY SERVICES, BDO INDIA, MUMBAI

"One of the hindrances to the success of IBC (Insolvency and Bankruptcy Code) was the delays from the judiciary system. Setting up additional tribunals to deal with IBC cases is a welcome step, which will expedite the resolution process."

"While the details are yet to be released, an integrated technology platform will also help in the timely dissemination of information and bring in efficiencies in the IBC process."

ARPIT MEHROTRA, MANAGING DIRECTOR, OFFICE SERVICES, COLLIERS INDIA, BENGALURU

"Lower stamp duties make purchasing property more affordable for women, potentially leading to a rise in the number of female homeowners."

"The reduction in costs associated with buying property can stimulate more real estate transactions, as women and families take advantage of the savings."

VIMAL NADAR, HEAD OF RESEARCH AT COLLIERS INDIA, MUMBAI

"Provision for multilateral financial aid to develop the new capital city (of Andhra Pradesh) will drive significant momentum in construction and real estate over the next few years across asset classes mainly commercial and residential."

"The announcement of 12 industrial parks under the National Industrial Corridor with a focus on creating integrated zones will propel supply of Grade A industrial spaces. This will also aid in increasing the proportion of organized superior quality stock within the industrial segment."

(Reporting by Anisha Ajith, Aswin Manikandan, Hritam Mukherjee, Dimpal Gulwani, Dhanya Skariachan, Nandan Mandayam, Manvi Pant, Bharath Rajeswaran and Chris Thomas in Bengaluru and Nikunj Ohri in New Delhi; Compiled by Indranil Sarkar; Editing by Varun H K)