Here’s how industry leaders reacted to Budget 2024

Finance Minister Nirmala Sitharaman today presented her seventh consecutive Union Budget 2024-25. This is also the first complete financial Budget of the Prime Minister Narendra Modi-led National Democratic Alliance (NDA) government in its third consecutive term. 

The theme for this year’s Budget was poor, woman, youth and the farmer.

One of the big moves that this Budget saw was the abolition of the angel tax. The Finance Minister today proposed to abolish the angel tax for all investor classes in its budget.

This was one of the key ask from the venture capital (VC) and private equity (PE) ecosystem to ease the pressure on early-stage startups and investors.

She also announced a revised income tax structure in the new regime while hiking the long-term capital gains tax. 

The government also lowered its fiscal deficit target for FY25 to 4.9% of GDP, lower than the 5.1% target announced during the interim budget in February.

The Budget saw positive reaction from the industry leaders. Here are some reactions from corporate leaders:

The angel tax remained the topic of interest for many. 

“Angel Tax abolished! This is one of the boldest moves made by the Finance Minister. It will be a big boost to the startup world and a game changer. In addition, the space economy will get a boost with a VC fund of Rs 1000 crore. Overall, it is a balance budget with a broad brush covering thrust on employment, skilling, infrastructure. It will greatly boost economic activity and will aid in job creation,” said Ninad Karpe, founder and partner, 100X.VC.

“Removal of this dreaded tax will give a huge fillip to startups in the country and free up investors to focus on the investments without having anxiety on how to deal with their implications. A few other things that work well for deep tech focused funds like us,” said Mayuresh Raut, Managing Partner, Seafund.

“The announcement of the removal of Angel Tax for all classes of investors is a monumental reform and a major step forward for Indian companies & investors. This decisive move ensures that our unlisted companies can thrive and scale from within India,” Ashley Menezes, Partner and COO, ChrysCapital & Chairperson, IVCA.

"Increasing the capital gains exemption from ₹1 lakh to ₹1.25 lakh will encourage middle-class investment in equities and mutual funds. However, raising long-term capital gains tax to 12.5% will impact HNIs' decisions on alternative asset investments. As domestic capital explores alternative investments, it's crucial for India to become competitive, attracting fund managers to invest in the local economy and create jobs," said Pearl Agarwal, Founder & Managing Partner, Eximius Venture

Spacetech

With an aim to expand the space economy by 5 times in the next 10 years, the government will set up a venture capital fund of Rs. 1,000 crore.

Vishesh Rajaram, Managing Partner, Speciale Invest, said the Budget will boost India’s space economy.

“The Indian space economy has the potential to reach $44 billion in the next 10 years from the current $8.4 billion, expanding India’s share of the global space economy by 4x from current 2% to 8%. We strongly believe that a Rs 1,000 crores fund for space startups and space economy will catalyse India's dominance in the global space market!” Rajaram said.

Technology

As for the technology sector, the government announced the Anusandhan National Research Fund for basic research and prototype development. The fund has a financing pool of Rs 1 lakh crore.

Bhaskar Majumdar, Managing Partner, Unicorn India Ventures believes the government needs to focus on the Intellectual Property regime.

“This is recognition of the growing need for a deeptech economy. However, alongside the R&D Fund, the government should look at the Intellectual Property  regime. The much overdue Patent Policy needs to come out soonest to enable maximisation of R&D Fund,” Bhaskar Majumdar, Managing Partner, Unicorn India Venture, said. 

Education and skill development

Among other initiatives, the Budget has allocated Rs 1.48 lakh crore for education, employment, and skilling. 

“At College Vidya, we're particularly excited about the government's decision to provide financial support for education loans up to Rs 10 lakhs for higher education in domestic institutions. The goal to skill 20 lakh youth through employment-linked initiatives addresses a critical gap between academic learning and industry requirements,” said Rohit Gupta, COO & Co-founder, College Vidya.

"While the budget makes strides in education and skilling, greater emphasis on tech infrastructure and digital skills is needed. Investing in AI hubs and refining EdTech regulatory frameworks will drive growth and position India as a global leader in innovation and education. Overall, the Union Budget lays a strong foundation for improving education and employability, but a balanced focus on skill development and supporting infrastructure is crucial for long-term success," said Varun satia, Founder & CEO, Kraftshala

Energy

The government announced several measures to boost the energy sector. From solar to thermal power, Sitharaman spoke about measures for the energy sector. For example, the PM Surya Ghar Yojana, with a cost outlay of Rs 75,021 crore, will power 10 million households and create 17 lakh direct jobs across the solar value chain.

The FM also announced new measures and policies around nuclear and thermal power plants. Nuclear energy is expected to form a significant part of the energy mix for “Viksit Bharat”.

“This Union Budget underscores the commitment to Vikisit Bharat 2047, prioritising energy transition. Financial assistance in the interim budget has benefited the biofuel industry by simplifying its supply chain and generating interest. The budget emphasises India's energy mix, focusing on clean energy sources, demonstrating the government's dedication to environmental sustainability,” said Kishan Karunakaran, CEO of Buyofuel.

Tourism

During her speech for the union budget for FY25, the finance minister made four key announcements to boost tourism, especially in Bihar.

"The hospitality sector had high hopes for the Union Budget. However, there is nothing spectacular in the Budget to bring structural changes to address the fundamental challenges it faces in a competitive world order," Pradeep Shetty, President of the Federation of Hotel and Restaurant Associations of India.

"Some key demands of tourism and hospitality to revitalise the sector such as GST rationalisation, granting of infrastructure status and bringing ease of doing business and policy reforms have not been considered in the budget," he added.

“Today’s budget announcement is a welcome move that promises to strengthen India’s position as a global hub for spiritual tourism. The continued investment in developing corridors will create a multiplier effect, stimulating the local economy and generating job opportunities. This initiative will add to the momentum that the industry gained from the Ayodhya boom earlier this year," said Anuj Rathi, Chief Business and Growth Officer, Cleartrip

(This is a developing story)