Industry’s reaction to Union Budget 2024-25

Industry’s reaction to Union Budget 2024-25

Allocation of a Rs. 1 lakh crore corpus for a 50-year interest-free loan to the private sector is poised to fuel R&D and innovation in India

  • By ICN Bureau | February 01, 2024

Before the presentation of the Union Budget 2024-25 by Finance Minister Nirmala Sitharaman on February 1, 2024, the chemicals, petrochemicals and energy sectors expressed their demands that included tax relaxations & benefits, expanded spend on R&D, and incentives, and more.

ICN brings together the industry’s reaction to the Budget 2024-25.

Deepak Shah, Chairman, Crop Care Federation of India (CCFI)

"The Indian agrochemical industry has resilience and demonstrated its potential in indigenous manufacturing both in terms of production and quality. Exports majorly by our members to 152 countries makes us confident that the government should work towards making India a manufacturing hub. However, in order to focus on Make in India there is an imperative need to increase customs duty on import of agrochemicals, (majorly being dumped by China) both on technical and formulations from existing 10% which is a disincentive for Indian manufacturers (favourable to importing hobby) and draining our valuable foreign exchange. It would be pertinent to share that we have almost 45% of unutilised plant capacities with heavy investment in R&D as well.

CCFI has reiterated the long pending demand of the Indian agrochemical industry and strongly recommends enhancing custom duty on technical to 20% and 30% on import of all formulations or at least maintain a delta of 10% between the two to minimize import of formulations which has no value addition, and quality on several occasions is questionable."

Rajesh Aggarwal, Vice Chairman, CCFI Crop Care Federation of India (CCFI)

“Investment in agriculture needs impetus to sustain MSMEs besides incentivising the Indian manufacturers by including this champion sector under PLI scheme with fresh investment of Rs. 12,500 crore in next three years. Creation of product specific HSN codes for technical & formulations would ensure curbing of unnecessary imports of products which can be indigenously manufactured.”

R. Mukundan, MD and CEO, Tata Chemicals Ltd.

“The Interim Budget has presented a clear vision for Viksit Bharat by 2047 using demography, democracy, and diversity as enablers. It reinforces India’s commitment towards people-centric, inclusive and sustainable development, with every Indian becoming active players in national growth.

The announcement of the bio-manufacturing and bio-foundry scheme gives fillip to India’s larger green growth mission. Along with climate-resilient activities for restoration and adaptation measures, these initiatives will go a long way in supporting our net-zero 2070 goals. Guided by the principle ‘Reform, Perform, and Transform’, the government has taken up next generation reforms such as strengthening the e-vehicle ecosystem, underscoring India’s ambition to be a manufacturing hub.

The Interim Budget focuses on economic policies that boost the profound transformation of the economy over the past decade. This comprehensive approach strengthens our belief in the nation’s economic trajectory, and towards a future where progress is synonymous with environmental and socio-economic inclusivity.”

Anurag Choudhary, CMD & CEO, Himadri Speciality Chemical Ltd.

“The interim budget marks a significant stride towards a forward looking and positive vision for India's development, encapsulating our aspiration for a 'Viksit Bharat.' The government's emphasis on bolstering the Electric Vehicle (EV) ecosystem, particularly through the expansion of charging infrastructure and promotion of EV public transport, showcases its commitment to sustainable development. By announcing a substantial corpus of Rs. one lakh crore for low to nil interest rate loans, aimed at fostering research and innovation in sunrise sectors, the government is paving the way for private sector participation in driving economic growth. This budget, with its unexpected fiscal deficit target of 5.1% reflects the government's determination to navigate challenges while prioritizing economic stability and growth.”

S. K. Chaudhary, Founder Director, Safex Chemicals

“The decision to step up value addition in the agriculture sector, reduce post-harvest losses, and boost farmer's income by improving productivity is commendable. We believe that the move to help micro food processing enterprises via 2.4 lakh SHGs and individuals through credit linkages and promoting of public and private investment in a range of post-harvest storage solutions will not only give a fillip to faster growth but will also benefit domestic agri players. Further, formulation of a strategy to achieve self-reliance in oilseeds is laudable since this will be backed by research on high-yielding varieties, value addition, and deployment of modern farming practices, crop insurance, and other measures.”

Raju Kapoor, Director, Industry & Public Affairs, FMC India

“The interim budget balances the fiscal prudence with growth. It has outlined various proactive measures for the agri industry at large. The allocation of a Rupees 1 lakh crore corpus for a 50-year interest-free loan to the private sector is poised to fuel R&D and innovation in India fostering a conducive environment for advancements. The continuity of the ‘PM Kisan Sampada Yojana’ will make available requisite investment at the hands of farmers to promote use of newer technologies in the form of advanced agri-inputs. The emphasis on empowering women self-help groups with significant credit linkages will benefit in rural development and we resonate very well with it. The focus on minimizing post-harvest losses is crucial, and similarly we appreciate the decision to expand nano DAP usage across all agro-climatic conditions, which will undoubtedly catalyze the growth of drone applications in agriculture and improve fertilizer use efficiency. Investments to minimize the post-harvest infrastructure is a welcome step.

The announcement to prioritize Atmanirbhar Oilseeds Abhiyaan using newer technologies is a much-needed initiative to reduce dependence on food oil imports. The government's focused effort to enhance dairy and fisheries productivity is welcome. The expansion of 'Lakhpati Didi' scheme’s target to cover 3 crore women will empower women at the grassroots level, contributing to the overall development of rural India.

The industry was also hoping for the introduction of PLI for ‘new-age’ agro chemicals, positioning India as a global exporter and addressing domestic opportunity. The government could have also rationalized GST on agro chemicals to 12 percent. Additionally, we anticipated tax incentives on R&D investments and extension activities by the industry would further encourage innovation in the sector. We remain optimistic about the positive impacts of the interim budget and look forward to collaborative efforts to address more concerns in the future.”

Kamal Nanavaty, Co-Chairman, CIl National Committee on Chemicals and Petrochemicals and President, Strategy Development, Reliance Industries Ltd.

Embarking on a transformative journey in the petrochemical sector, the budget unveils the launch of a strategic bio-manufacturing scheme for promoting eco-friendly alternatives - from biodegradable polymers, bio-pharmaceuticals and bio - agri -inputs to align with global and Indian sustainability trends across all verticals thus opening up New Markets and creating massive new employment opportunities promising long term growth for Indian youth.

Sanjiv Kanwar, MD, Yara South Asia

“We welcome and commend the government's focus on empowering poor, youth, women, and farmers through the interim budget announcement today. The increase in MSP for producers whenever required and the provision of basic goods has raised rural real income, which is a positive step towards ensuring the well-being of our farmers. We are also pleased to see the government's commitment to modernizing storage, supply chains, and branding in the farm sector, which will benefit both farmers and consumers. Overall, we believe that this budget will provide a much-needed boost to the agriculture sector and encourage private and public investment in post-harvest activities. As a company committed to sustainable agriculture practices, we believe that continued investment in this sector is crucial for the long-term growth and prosperity of our country.”

Girishkumar Kadam, Senior Vice President & Group Head - Corporate Ratings, ICRA

“The budget’s focus with measures on green energy continues to reinforce the commitment towards achieving energy transition in the long run. The Viability Gap Funding (VGF) scheme for offshore wind energy is expected to improve its cost competitiveness, and will further aid the renewable capacity addition in the long run. Further, measures for the promotion of roof-top solar remain positive for the renewable sector. Given the abundant coal reserves in the country, the stated intent to implement a 100 MT coal gasification & liquefaction facility will benefit the chemical sector, through improved domestic synthetic natural gas availability and lowering the import dependency on ammonia and methanol in the long run. Further, the proposed expansion of nano DAP application in all agro-climatic zones would benefit the fertilizer sector through lower imports as well as subsidy requirements. This apart, the mandatory use of compressed biogas in CNG and PNG is a step in the right direction, to meet the growing requirements of natural gas in the country and is also expected to benefit the entities in the city gas distribution sector through lower dependency on imported LNG.”

Pankaj Poddar, Group CEO, Cosmo First Ltd.

"Being an election year, the government has adopted a policy of minimal changes. Instead of freebies, the government has looked at real upliftment & growth through building of rural houses, Roof top solarisation meeting sustainability goals & providing free electricity, increasing seats for medical students, vaccination, modern storage for agricultural products, increasing dairy productivity, aqua parks etc. The government continues to work towards fiscal consolidation, which should help build credibility globally. Interest free or near interest free long-term loans for Research is a Welcome step and so is enhanced investment on the infrastructure and city development. Some of this investment must be allocated towards cleaner cities with better waste management.”

Ashwani Sehgal, President, Indian Solar Manufacturers Association and MD, Alpex Solar Ltd.

"It's a very positive step that the government announced in its interim budget that one crore homes would get solar panel installation. This offers a robust 30 GW opportunity and has massive upside for the solar manufacturers. This announcement by our finance minister is a big welcome and game changer for solar manufacturers, environment, local job creation, and shall take solar panels to all nooks and corners of Bharat.”

Nishant Kanodia, Chairman, Matix Fertilisers & Chemicals Ltd. 

“The Interim Budget focuses on Viksit Bharat by 2047, outlining a clear and practical road map for India’s growth. We remain a beacon of growth to the global economy, and measures supporting equitable and sustainable growth will promote progress. This budget promotes harmony with nature, incentivises modernisation of infrastructure, and opportunity for all. It outlines a clear strategy that strongly backs agriculture through farmer-friendly policies such as PM Kisan Samman Yojana and PM Fasal Bima Yojana. One of the key factors of inclusive growth is economic empowerment. It is heartening to learn that the Pradhan Mantri Kisan Sampada Yojana has created 10 lakh employment and assisted 38 lakh farmers so far. The government’s comprehensive approach strengthens our nation’s food security while heralding a future where progress is synonymous with environmental and socio-economic inclusivity.”

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