A number of industries are eagerly awaiting significant funding increases and policy changes as Hon. Finance Minister Nirmala Sitharaman gets ready to unveil the Union Budget for 2024–25 on July 23, 2024.
Sustainability and resilience in India's quickly growing economy depend on Environment, Social, and Governance (ESG). The use of ESG principles will be crucial to India's economic development as it aspires to become the third-largest economy globally. By upholding ESG principles, the Indian MSME sector—a notable engine of economic growth—can further stimulate the nation's economy. It is essential to facilitate this through accessible funding, boosted investor confidence, and encouraging policies.
In an effort to encourage environmentally friendly activities and investments in renewable energy and sustainable infrastructure, the government has already started to take action, such as issuing Sovereign Green Bonds (SGBs) and putting the Green Credit Rules, 2023, into effect. This program is further supported by the RBI's framework for financial institutions to accept Green Deposits. It is anticipated that the 2019 budget will contain measures to promote green deposits and increase the level of green investment.
Increased spending on CSR and the inclusion of ESG-approved projects in Schedule VII activities are two anticipated changes to the Companies Act, 2013's present CSR regulations. This would make it possible for businesses to directly fund important ESG initiatives, helping organisations that lack the funding to carry them out on their own.
Clear incentives like grants, subsidies, and tax breaks are anticipated to be included in the budget, along with funding possibilities including cooperative bank loans, schemes, and other forms of debt financing for business endeavors. Given their importance for innovation and skill development, industries including education, healthcare, and agriculture are probably going to receive extra attention.
The four labor codes' implementation and enforcement are intended to handle major social transformations and ease corporate operations. It is probable that the budget will implement labor welfare measures aimed at enhancing community involvement, nurturing talent, and improving working conditions. Incentives for entrepreneurship and skill-building initiatives are also expected to successfully combat unemployment.
Effective corporate governance and efficiency have been highlighted by the RBI, SEBI, and Ministry of Corporate Affairs (MCA). It is anticipated that the budget will assist companies using emerging technologies by easing the digital and technological shifts required for regulatory filings, operational effectiveness, and compliance. Blockchain, artificial intelligence, data analytics, and technological integration will improve digital record-keeping and oversight by businesses and authorities.
It is anticipated that the budget will include tax breaks for middle-class individuals in addition to an emphasis on ESG and economic growth. Reducing their tax burden could increase disposable income, spur demand, and support overall economic growth. This group has been essential in boosting consumption and economic activity. It is expected that middle-class families will benefit from these tax savings, which will also increase their purchasing power and promote a greater standard of living.
In conclusion, it is anticipated that the Union Budget 2024–25 would establish a vital framework for the geopolitical, social, and technical shifts influencing international ESG and sustainability projects. In addition to giving the middle class much-needed tax relief, the Finance Minister is likely to improve ease of doing business and booster investor confidence.