The upcoming union budget 2024 serves as a vote of account before the Lok Sabha elections in 2024. Therefore policy and structural transformation might be of pinnacle interest to the current Government. A full drawn union budget will be placed after the Lok Sabha Elections in 2024.
The current Government might aim to reduce the fiscal deficit to 4.5 per cent of GDP by FY26 showcasing a target to fetch a 5.9 per cent of GDP target for FY24.
Key Expectations From the Upcoming Union Budget 2024 for Electronics and the Technology Sector
According to many experts keeping track of the upcoming Union Budget 2024 hinted that the AI sector will come into the major highlight:
- Followed by data protection, cybersecurity & digital infrastructure.
- Not to forget emerging renewable energy resources like Green hydrogen and Ammonia might also echo during the upcoming Union Budget 2024.
- Infrastructure, sustainability, and innovation to emerge as a louder voice in this upcoming budget 2024.
- Also, the EV sector can be of another pinnacle focus in the upcoming budget 2024. Here, the FAME scheme can be revived across many pages and formulations.
- The ongoing 18% tax on Lithium-ion batteries can be rechecked to further drive the indigenous EV sector.
- The PLI scheme may also be extended to various other industries.
- Simplified tax structures, improved funding accessibility for digital transformation, and incentives promoting the integration of AI-driven tools.
- Streamlining Advanced Pricing Agreements (APAs) and Mutual agreement procedures (MAPs) shall be critically important.
- Fosters an environment conducive to innovation and collaboration, aligning with the Make in India initiative enabling a seamless taxation structure around royalty payments.
Budget 2023 Highlights for the Electronics and Technology Sector
- Finance Minister Nirmala Sitharaman in her budget 2023 announced significant relief in customs duty on the import of certain parts and inputs like a camera lens and continued the concessional duty on lithium-ion cells for batteries for another year.
- The finance minister announced to reduction of customs duty on parts of open cells of TV panels to 2.5 per cent from 5 per cent earlier.
- The Finance Minister emphasized skill development for green energy products, drones, robotics, and IoT.
- 50-year loans to the state to create an ecosystem for electronics manufacturing.
- To establish 30 Skill India international centres, 100 premier labs for developing applications to use 5G services, and centres of excellence for AI.
Key Quotes of Tech Industry Leaders Before the Union Budget 2024
Sharing his key reaction quote on the Pre-Union Budget 2024, Vivek Tyagi, Managing Director, Analog Devices Inc. India mentioned, “As we approach the Union Budget 2024, we at Analog Devices Inc. are hopeful for a forward-looking fiscal roadmap that steers the nation towards technological prowess and sustainable growth.
“We believe the upcoming budget will play a crucial role in shaping India’s economic development, particularly in emerging sectors like semiconductors, e-mobility, green hydrogen, and renewable energy. Recent commitments observed at the Vibrant Gujarat Global Summit 2024 underscore the industry’s collective dedication to Indian Government’s vision of a ‘Developed India @2047, continued Vivek Tyagi.”
Talking about encouraging policies, Vivek Tyagi emphasized, “In this dynamic landscape, we encourage policies that bolster the indigenous semiconductor manufacturing ecosystem. The announcements by global players to invest in Gujarat highlight the sector’s potential and the need for a conducive policy environment. We believe that the budget should be a catalyst for nurturing innovation, research, and skill development, particularly in frontier technologies like artificial intelligence, 5G/6G networks and renewable energy.”
As the world embraces the integration of 5G technologies, AI-enabled solutions and sustainable practices, we look to the budget to provide a strategic framework that not only navigates current challenges but also sets the stage for India’s emergence as a global technology and innovation hub.
“In essence, the forthcoming budget represents a pivotal opportunity for India to fortify its position on the global stage, and Analog Devices Inc remains committed to contributing to this transformative journey concludes Tyagi.“
Raman Bhatia, Founder & Managing Director, Servotech Power Systems Ltd. shared his budget expectations regarding the EV Industry and the Solar Industry:
The automotive industry anxiously awaits insights into the GST landscape, particularly for entry-level two-wheelers. Expectations center around potential FAME 3 schemes and a revision of GST rates for electric two-wheelers. Calls for a uniform 5% GST on all EV spare parts, aligning with the 5% GST on vehicles, echo the industry’s aspiration for a more equitable tax structure. Advocacy for innovation-centric initiatives, coupled with capacity-building incentives, is paramount for widespread EV adoption. The recommendation to lower the GST rate on batteries from 18% to 5% aligns battery swapping and subscription services with EVs, representing a crucial step forward.
Putting his notion about the EV sector, Dinesh Arjun- Co founder and CEO at Raptee Energy
“As the electric vehicle (EV) industry gears up for substantial growth in the coming years, it is imperative for the government to foster a supportive ecosystem. To stimulate investment opportunities, there should be encouragement for potential investors, coupled with essential reductions in GST rates for electric vehicles and charging stations. Additionally, easing the burden on the industry can be achieved through a decrease in import duties on electronic components. The industry is particularly hopeful for a significant GST reduction, aiming to bring it down from 18% to 5% specifically for lithium-ion battery packs and cells, given their pivotal role in the EV sector. A concerted effort in the budget towards enhancing the ease of doing business and facilitating the entry of local players into the market is crucial. Addressing aspects like component localization and ensuring easy access to necessary components will empower Indian companies, both large and small, to develop competitive products at competitive prices, further solidifying the sector’s growth potential.”
Amrish Pipada, Founder & CEO, Mega Networks Pvt. Ltd.
“As part of India’s Digital India initiative, we at Mega Networks Pvt Ltd are committed to contributing to the vision of ‘Vikshit Bharat’ by 2047. As a leading force in innovation, our country has made significant strides in digital public goods and has emerged as a top global player in phone manufacturing. Capitalizing on the skilled workforce and the dynamic IT environment in the region, we believe that the convergence of ‘Made in India’ with Digital India 2.0 will propel the IT hardware industry to an unprecedented growth trajectory, positioning it as a sunrise sector. The government’s support in extending Production Linked Incentive (PLI2.0) benefits for R&D investments would serve as a critical catalyst for companies like ours, poised to transition from domestic leadership to global eminence through pioneering innovations in manufacturing. In particular, we envision breakthroughs in crucial domains such as AI servers and storage, which form the backbone of our data-driven ecosystem.”
Hitesh Garg, Vice President, and India Managing Director, NXP Semiconductors shared his views on the budget expectations.
“As we approach Union Budget 2024, the semiconductor industry in India is all set for a significant boost. Programs like PLI and DLI, especially in supporting Global MNCs, are set to spark innovation on a global scale. The rapid formation of the Indian Semiconductor Research Consortium (ISRC) further indicates a commitment to progressive research.
Our pre-budget forecast emphasizes on joint funding and collaboration with technology leaders, which can be seen as a smart move to establish India as the world’s semiconductor hub. The key proposals include the exemption from customs duty for electronic transmissions and a uniform tax policy that fosters favorable business conditions by promoting smooth cross-border data flow.
The focus on fostering start-ups and creating jobs in the semiconductor industry also brings out India’s stride towards becoming a center for advanced technological prowess, ensuring a resilient semiconductor ecosystem.”
