How Budget 2024 aims to ignite the Viksit Bharat engine

By Bipin Sapra and Smritikona Dutta
Budget 2024: Armed with the vision to propel India to become a developed country by 2047, the Union Budget 2024 aims to focus largely towards strengthening the Make in India initiative and ease of doing business thereby providing the required stimulus to the manufacturing sector and enabling large scale job creation.
On the Indirect tax front, the industry welcomes the much-needed announcement for a comprehensive review of the rate structure under Customs enabling ease in product classification and dispute reduction.The proposal of lowering of Customs duty on a plethora of raw materials and products including solar cells, critical minerals and bullion are encouraging measures. The rationale behind such reduction clearly indicates support towards domestic manufacturing, deepening value addition and supporting targets in reducing carbon footprint.
Relevant amendments under the Customs law have been made to provide increased time limits for re-imports and re-exports to enhance competitiveness of the fledgling MRO sector. The government has extended significant duty reduction and exemption benefits to the healthcare and electronics sectors, continuing the impetus of incentives provided under the Production Linked Incentive (PLI) scheme.
Since their introduction in March 2020, the PLI schemes have indeed supported in revitalizing the manufacturing sector and strengthening the necessary supply chains. The success achieved in the mobile manufacturing sector has now enabled the Government to reduce customs duties on mobile phones and components, signalling a mature environment. The Budget proposals aim at reproducing similar outcomes for semiconductor and pharmaceutical industry by increasing the budgetary allocation.
Buoyed by the increasing revenue collection under GST signalling a shift towards a mature tax regime, this Budget has harmonized the timeframes for the issuance of demand notices and adjudication orders for cases involving fraud, suppression or otherwise. Significant amendments to the GST legislations have been introduced reflecting the recommendations proposed by the GST Council such as regularizing non-levy of GST due to general practice which may turn out to be a breather for certain impacted industries reeling under huge tax demands.
The Insurance sector has been provided much relief through the GST council recommendations which have been cemented in the present budget thereby ending long standing disputes on their business practices.
The Government's efforts to push forward with its reform agenda are evident as plans to incentivize states for their business reform actions plans and digitalization through the Jan Vishwas Bill 2.0 is proposed. Further, setting up of e-commerce export hubs is envisaged to facilitate easier access to international markets for domestic players.
The recent implementation of Budget proposals allows the government to maintain momentum in its reform agenda. These policy measures implicitly reaffirm the significance of India Inc as a crucial element in the development of infrastructure. However, there are still some expectations required to be met to march towards a Viksit Bharat 2047.
(Bipin Sapra and Smritikona Dutta are Tax Partners at EY India)