Budget for Viksit Bharat focuses on employment, skilling, and climate change mitigation

Finance Minister Nirmala Sitharaman presented her seventh consecutive Budget in Parliament. She announced key employment schemes. For the pursuit of ‘Viksit Bharat’, the budget envisages sustained efforts on 9 priorities for generating ample opportunities for all.

Smt. Sitharaman said that in this budget, we have focused on employment, skilling, MSMEs, and the middle class. She announced the Prime Minister’s package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over 5 years with a central outlay of ₹2 lakh crore. This year, ₹1.48 lakh crore has been allocated for education, employment and skilling.

In line with the strategy set out in the interim budget, this budget envisages sustained efforts on the following 9 priorities for generating ample opportunities for all.

1. Productivity and Resilience in Agriculture
2. Employment & Skilling
3. Inclusive Human Resource Development and Social Justice
4. Manufacturing & Services
5. Urban Development
6. Energy Security
7. Infrastructure  
8. Innovation, Research & Development and
9. Next Generation Reforms.

PM Narendra Modi remarks, “Budget for Viksit Bharat ensures inclusive growth, benefiting every segment of society and paving the way for a developed India. The government has announced the Employment Linked Incentive scheme. This will create crores of new jobs. This Budget brings a new scale to education and skill development. Today’s budget will act as a catalyst in making India the third largest economic power in the world and will lay a solid foundation for a developed India.”

Asserting the commitment to make India the manufacturing hub of the world, the Prime Minister emphasised the links of MSME with the middle class of the country and its employment potential for the poor segment. To create big strength for small industries, the Prime Minister informed about the new scheme announced in the Budget that will increase the ease of credit for MSMEs. The announcements in the Budget will take manufacturing and exports to every district. He said, “E-commerce, export hubs and food quality testing will give a new momentum to the One District-One Product programme.”

The Prime Minister underlined that the Union Budget 2024-25 brings numerous opportunities for India’s startup and innovation ecosystem. He gave examples of a one thousand crore rupees corpus fund to vitalize the space economy and the abolition of the angel tax.

Referring to the Skilling programme, the Finance Minister announced a new centrally sponsored scheme, the 4th under the Prime Minister’s package, for skilling in collaboration with state governments and Industry. 20 lakh youth will be skilled over 5 years and 1,000 Industrial Training Institutes will be upgraded in hub and spoke arrangements with outcome orientation. 

Job Creation and skill development in manufacturing

This scheme will incentivise additional employment in the manufacturing sector, linked to the employment of first-time employees. An incentive will be provided at a specified scale directly to the employee and the employer concerning their EPFO contribution in the first 4 years of employment. The scheme is expected to benefit 30 lakh youth entering employment, and their employers.

FM announced to bring out a financial sector vision and strategy document to meet the financing needs of the economy and prepare the sector in terms of size, capacity and skills. She added that this would set the agenda for the upcoming five years and guide the work of the government, regulators, financial institutions and market participants.

Taxonomy for climate finance

The Minister proposed to develop a taxonomy for climate finance. This is expected to enhance the availability of capital for climate adaptation and mitigation, which can help achieve India’s climate commitments and green transition.

Adoption and Use of Technology

We have used technology to improve productivity and bridge inequality in economy during the past 10 years. Public investment in digital infrastructure and innovations by the private sector has helped to improve access to all citizens, particularly the common people, to market resources, education, health and services. We will step up the adoption of technology towards digitalization of the economy.

For improving data governance, collection, processing and management of data and statistics, different sectoral databases including those established under the Digital India mission, will be utilised with active use of technology tools.

Customs duty is proposed to be removed on oxygen-free copper for the manufacture of resistors and to exempt certain parts for the manufacture of connectors. Lithium, Copper, and Cobalt are exempted from Custom Duty.

Pumped Storage Policy

The Finance Minister said that a policy for promoting pumped storage projects will be brought out for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable & intermittent nature in the overall energy mix.

Energy Transition

The interim budget announced a strategy to sustain high and more resource-efficient economic growth, along with energy security in terms of availability, accessibility and affordability. We will bring out a policy document on appropriate energy transition pathways that balances the imperatives of employment, growth and environmental sustainability. Terming energy transition as critical in the fight against climate change, FM announced the expansion of the list of exempted capital goods for use in the manufacture of solar cells and panels in the country.

 “Our government will seek the required legislative approval to provide an efficient and flexible mode for financing leasing of aircraft and ships, and pooled funds of private equity through a ‘variable company structure’,” added Smt. Sitharaman.

Vegetable production & supply chain

Large-scale clusters for vegetable production will be developed closer to major consumption centres. It will promote Farmer-Producer Organisations, cooperatives and start-ups for vegetable supply chains including collection, storage, and marketing.

Participation of women in the workforce

Union Finance Minister announced an allocation of more than ₹. 3 lakh crore for schemes benefitting women and girls. This is envisaged as a measure to promote women-led development, she elaborated. It will facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry and establishing creches.

Industry speaks …

Climate Action

Dr. Miniya Chatterji, Founding Director, Anant School for Climate Action, and CEO, Sustain Labs Paris,

“The government has laid its focus on energy security as one of the pillars in the Union Budget 2024. The new policy document on India’s energy future is much awaited, and I expect it to include the plans to achieve rooftop solarization, enhancing electric vehicle infrastructure, and promoting biodegradable polymers & bioplastics – as was announced in the interim budget in February. I also look forward to the government’s focus on developing indigenous energy technologies and building local capabilities amongst micro and small industries in energy production and management. On that note, the provision of financial support to micro and small industries for shifting to cleaner forms of energy is also a commendable move by the government. Another good move is the exemption of custom duty on capital goods for manufacturing of solar cells and panels. A taxonomy for climate finance, as planned by the government, will help improve the availability of funds for adapting to climate change and reduce greenhouse gas emissions. Under urban development, the budget also talks about promoting water supply, sewage treatment and solid waste management projects and services for 100 large cities in India. This will set a benchmark for water and waste management practices, which can then expand to tier-2 and tier-3 cities eventually.”

Sunil Mathur, Managing Director and Chief Executive Officer, Siemens Limited

“We welcome the Government’s consistent approach towards Fiscal consolidation, supporting Capex in Infrastructure by reconfirming the allocation of ₹.11.11 lakh crore in the Budget as also additional allocations towards improving Urban and Rural Infrastructure. We also welcome the Government’s focus on employment generation, skilling, Woman empowerment, MSMEs and climate change mitigation as well as their encouragement to the States to carry out land and labour reforms and improve the Ease of Doing Business further. We believe this Budget paves the way for the next generation of reforms which we are confident will lead India to its deserved place of being Viksit Bharat.”

Refrigeration

Sanjay Jain, Director, Elanpro

“The proposed schemes and policies in the Union Budget 2024-25 suggest a strong and inclusive strategy for driving economic growth, enhancing employment prospects, and promoting sustainable development across multiple sectors.
Emphasising on skill development, support for MSMEs, urban and rural advancement, women’s involvement, energy security, and technological innovation, it sets out a plan for ‘Viksit Bharat’.
The budget prioritises enhancing MSMEs by introducing a new credit assessment model based on digital footprints and offering term loans for machinery and equipment purchases without requiring collateral or a third-party guarantee. Moreover, establishing new SIDBI branches in MSME clusters to enhance reach and provide direct credit to businesses will significantly improve cash flow in the market and support various industries. Domestic tourism is expected to boost HoReCa growth, which
will boost the commercial refrigeration industry. The budget allocates financial support to establish 50 irradiation units in the MSME sector and 100 NAB-accredited food quality and safety testing labs. These measures will enhance food safety and quality, making compliance crucial. The standout measure of this budget is the focus on youth employment especially measures such as job creation in manufacturing is expected to benefit 30 lakh youth and their employers. The budget also aims to revitalize agriculture through several measures. By concentrating on vegetable production and improving the supply chain, farmers will achieve better returns through crop diversification and expanded market access. Large-scale vegetable production clusters to be established near major consumption centers will help farmers capitalise on market opportunities. While these measures are encouraging, it’s vital to ensure they are effectively implemented and maintained to translate these announcements into actual progress. We eagerly await the positive effects of the budgetary allocations on the well-being of our citizens.”

Logistics and Transport

Rohit Chaturvedi, Partner, Transport and Logistics, Government, Infrastructure, and Development Sector Advisory Services, Forvis Mazars in India

“The government’s focus on the logistics sector, particularly through the establishment of e-commerce export hubs, is a transformative step for MSMEs and traditional artisans aiming to access international markets. These hubs, set up in public-private partnership mode, will streamline trade and export services under one roof with a seamless regulatory and logistic framework. This initiative along with measures to promote manufacturing and service internships at top companies, will significantly boost India’s global trade capabilities. Additionally, the implementation of GST has decreased the tax incidence on the common man and reduced logistic costs for the industry, marking a significant success. We need to focus on incentivising the surface logistics industry to adopt greener practices. By offering tax benefits for companies embracing green technologies and establishing fiscal incentives for the development of charging infrastructure for commercial vehicles. However, we believe the overall direction of the budget indicates a continuous push towards the growth of the logistics sector.”

Sustainability

Sandeep Mohanty, Partner and Leader – Climate & Sustainability Strategy, PwC India

“India is planning to spend over USD 130 billion towards infrastructure in FY25 to meet the country’s socio-economic ambitions. The country is also keen to act on climate change which will require more resources in climate mitigation and adaptation sectors. Climate finance will also be crucial to facilitate the shift towards a low carbon economy. The Union Budget 2024 also declared India’s intent to develop climate finance taxonomies which will provide clear, transparent, consistent and standardised definitions of  ‘green’ investments. Climate finance taxonomies can reduce green-washing, lower transaction costs and increase investor confidence, thereby facilitating greater capital flow. Companies and financial institutions can report on their alignment with the taxonomies, leading to greater transparency and accountability in their climate-related activities. This will help the country in planning and developing infrastructure which is resilient against climate change. However, we need to ensure that our taxonomies are suited for India and should take into account India’s socio-economic and infrastructural realities to ensure that it can enable a green transition in a just manner. ”

Job creation and Skilling

B.Santhanam, CEO of Saint-Gobain India and APAC 

“We welcome this year’s Union Budget, which marks a significant stride towards a brighter future for India. The government’s focus on job creation, consumption, and women’s empowerment is commendable. The financial support and completion of key projects, such as the Polavaram Irrigation Project in Andhra Pradesh, along with investments in the Vishakhapatnam-Chennai Industrial Corridor, and major announcements for the North and West region will boost infrastructure, and economy and ensure food security.  The emphasis on create, design and ‘Make in India’ further strengthens domestic manufacturing and promotes self-reliance. Investments in industrial corridors, MSME credit, and PM Awas Yojana Urban 2.0 will drive growth. The budget balances economic growth, social welfare, and innovation, charting a robust path for India’s future.

Niranjan Nayak, MD, Delta Electronics India

The Union Budget 2024-25 presents a compelling vision for a thriving ‘Viksit Bharat, we at Delta are particularly encouraged by the government’s comprehensive approach that prioritizes skilling, infrastructure development, and digital transformation. The focus on creating a skilled workforce through internship programs aligns perfectly with our commitment to nurturing talent and driving innovation. We also applaud the budget’s emphasis on increasing women’s participation in the workforce. Initiatives like women’s hostels, creches, and skill development programs are crucial steps towards a more inclusive and empowered society. Delta strongly believes in the power of diversity, and these measures will contribute significantly to India’s socio-economic progress. Overall, the budget catalyses accelerating our growth trajectory and supporting India’s digital transformation journey. Delta’s focus on emerging technologies and domain expertise aligns seamlessly with the government’s vision for a knowledge-based economy. We are excited about the opportunities presented and confident in our ability to play a central role in shaping a ‘Viksit Bharat.’

Clean Energy

Ashish Bhandari, Managing Director & CEO at Thermax

“This budget is a decisive step towards India’s energy independence and a cleaner, greener future, strategically advancing the goal of ‘Viksit Bharat’. By prioritising energy security and announcing a dedicated policy on energy transition, the government has a clear commitment to achieving Nationally Determined Contributions (NDC) goals. The focus on job creation, sustainability, and promoting renewable energy is commendable. Solar energy will be key in achieving our energy transition goals, with initiatives like the PM Surya Ghar Muft Bijli Yojana enabling energy access to households and reducing pressures on energy grids. Additionally, financial assistance to MSMEs for transitioning to clean energy and implementing energy efficiency measures is a visionary approach. This budget lays a strong foundation for bridging the energy availability gap and advancing energy sustainability”.