Union Budget 2024 is a growth-oriented budget. The nine key focus areas of enhancing productivity in agriculture, improving employment & skilling opportunities, inclusive development, manufacturing, urban development, energy security, infrastructure, innovation, R&D, and next-generation reforms — not only form the bedrock of growth but also fortify the foundations of the Viksit Bharat dream.
With the wind blowing in the right direction for India, its projected GDP growth of around 6.5-7% for the current fiscal year bodes well amidst a global slowdown. It is a testament to India’s feat of achieving 8.2% GDP growth in FY24, even when other leading economies were finding it difficult to maintain a strong footing.
MSMEs reinvigorated
The MSMEs form the backbone of the country and it would be safe to say that they are undoubtedly the unsung heroes of India’s growth path in the last fiscal year. Therefore, there was a pressing need to improve the ease of doing business for the MSMEs in the country, enabling better access to key resources for running and scaling their business.
Budget 2024 ensured that it mobilized the budget in a big way by boosting the MSMEs, by increasing the MUDRA loan limit from Rs 10 lakh to Rs 20 lakh. This bold move will not only ensure enhanced capital availability, and drive innovation but will also spur employment generation opportunities. By doubling the financial support, the government is empowering MSMEs to expand operations, invest in new technologies, and create a more resilient and dynamic economic landscape.
Furthermore, the introduction of a credit guarantee scheme will offer a safety net for lenders as the eligibility criteria will be based on digital footprint, thus encouraging them to extend more credit to MSMEs. The MSMEs were one of the hardest to bear the brunt of the COVID and such state-backed loans would make banks more comfortable with lending to them.
Startup ecosystems get the much-needed boost
At the same time, the startup ecosystem received a much-needed boost as the Hon’ble FM abolished the angel tax. The angel tax was a bone of contention for many startups as many felt that the tax on investments was antithetical to capital formation. This elimination would provide the impetus to the sector, simultaneously creating an environment that will usher in financial liberty for the founders. The move also underlines the government's sincerity in walking the talk to boost startup funding and innovation.
Women-led development
Therefore, for MSMEs to now expand and become growth engines, it is pivotal to ensure that more women are incorporated into the ecosystem. Increasing women's leadership and participation in the digital and financial technology (fintech) industry requires providing girls and young women with a strong foundation in science, technology, engineering, and math (STEM).
This is where the visionary Budget represents a dynamic shift by promoting women-led development, through its allocation of over 3 lakh crores for schemes benefitting women and girls. This signals the government’s commitment to enhancing women’s role in economic development.
Employment and skilling
At the same time, the Employment Linked Incentive scheme will definitely boost the employment environment within the country. Under this scheme, a month’s wage will be given to new entrants to the formal workforce in three installments of up to Rs 15,000. The eligibility for this is to have a monthly salary of Rs 1 lakh.
The three schemes, including Scheme A, which ensures one month's salary for freshers, Scheme B, which ensures job creation in manufacturing, and Scheme C which provides support to employers, all benefit first-time employees as they enroll in the EPFO.
But development can’t happen without proper skilling initiatives. The new skilling initiatives especially keeping the youth in mind are praiseworthy. With the government's mission to skill, upskill, and reskill over 20 lakh youth over five years, India can resolve the growing skill gap across sectors. Furthermore, the revising of the Model Skill Loan Scheme is expected to help 25,000 students every year, and this novel step will now be able to facilitate loans up to 7.5 lakh with a guarantee from a government-promoted fund.
All in all, the Budget 2024 showcases India’s growth ambitions along with social welfare. The Budget ticks the right box, and the proposed actions are steering the country in a progressive direction.
(Bipin Preet Singh is the Co-founder & CEO of MobiKwik.)
Disclaimer: The views, thoughts and opinions expressed in the article are solely the author’s and are not representative of the author's employer/ organisation.
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