• Notification Date: 01-02-2024
• Notification No: N/A

Expectations for FMCG, Auto and IT Sectors from Budget 2024

On February 1, Union finance minister Nirmala Sitharaman will unveil budget for financial year (FY) 2024-25. While various sectors have their expectations from the finance minister, major announcements are not expected as the upcoming budget will be ‘interim’; this is because the government faces a general election this year. 

The full budget for FY24-25 will be tabled in July by the incoming government. 

HT's sister publication, Mint' spoke to experts from infra, FMCG, auto, and IT sectors, to see what each sector expects from FM Sitharaman. 

FMCG 

In the fast-moving consumer goods (FMCG) sector, investments in digital infrastructure, skill up-gradation, job creation, and MSME development are anticipated to indirectly revive and boost consumption spending, notes Axis Securities. 

Axis also calls for an increased allocation to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), and proactive schemes in the agriculture sector, to support the farm economy toto the overall enhancement of rural household income. 

Auto 

Gyanendra Tripathi, Partner & Leader, Western Region, Indirect Tax, BDO India, tells Mint that he believes that the auto sector currently has the ‘most complex’ tax structure with multiple custom duties. 

“The electric vehicles (EV) industry has been sending representations seeking a reduction in the GST rate on parts/components used in manufacturing EVs (18/28% GST), and on batteries (18% GST) to 5%,” Tripathi said. 

He added: "The industry is also looking for an extension of FAME subsidies, clarity of tax treatment on EV charging, eligibility of ITC on setting up of the charging stations, and a GST rate reduction on entry-level two-wheelers. Lastly, the auto component manufacturers are looking for a uniform tax rate on the parts, ideally 18%, to avoid the disputes arising from differential rates of tax. 

IT 

Shashank Srivastava, Senior VP, Forsight.ai, says that he hopes to see ‘extended tax holidays for startups and further incentives for investments in R&D for artificial intelligence and other deep technologies.’ 

He also hopes for skilling programs and higher education partnerships focused on digital skills can help build India's talent base in AI and data science to over 50 million workers by 2030.