The Union budget for 2024-25 was an interim budget on account of the general election schedule in April-May’24. As expected, being an interim budget, there were no significant policy changes. No changes in direct or indirect taxes were proposed.
The budget aligned with the path of fiscal consolidation and macroeconomic stability as guided in the 2021-22 budget. It also saw a lower-than-expected increase in capital expenditure, helping reduce the fiscal deficit and facilitate higher credit availability for the private sector. The capex outlay saw a tilt towards the states as they got a larger share. Most announcements were in the railways, energy, housing, and healthcare sectors.
Top takeaways from the budget
- The budget outlined the need to focus on the Poor, Women, Youth, and farmers, as their empowerment and well-being will drive the country forward. The next five years are expected to be unprecedented in development, helping India progress and realize the dream of a developed India by 2047. The trinity of Democracy, Democracy, and Diversity backed by everyone’s efforts will be key in fulfilling the aspirations.
- Capital expenditure for FY25 is estimated at Rs. 11.1 lakh crore, a jump of 11.1% from last year’s budgeted estimate of Rs. 10 Lakh Crore. This is 3.4% of GDP, higher than last year at 3.3%.
- FY24 fiscal deficit estimate was lowered to 5.8% from 5.9% budgeted earlier. For FY25, the fiscal deficit is expected to drop to 5.1% on account of slower growth in capex and sustained growth in tax and non-tax revenues. This is in line with the aim to reach a fiscal deficit of 4.5% in FY26. On the non-tax revenue front, divestment of Rs. 50,000 Cr. is expected in FY25 Vs. the revised estimate of Rs. 30,000 Cr. for FY24.
- Three major economic railway corridor programs will be implemented: energy, mineral, and cement corridors, port connectivity corridors, and high-traffic density corridors. This will accelerate GDP growth, reduce logistic costs along with decongestion, and improve the operations of passenger trains.
- Through rooftop solarization, one crore households will get up to 300 units of free electricity every month. This will bring in savings of Rs. 15,000-18,000 annually, entrepreneurship opportunities for vendors, and employment opportunities for youth.
- A corpus of Rs. 1 Lakh Crore will provide long-term financing or refinancing with long tenor at low or nil interest rates and encourage the private sector to scale up research and innovation in sunrise domains.
|INCOME (Rs. lakh Cr.)
|Net Tax Revenue
|Recovery of Loans
|Total Income (B)
|EXPENDITURE (Rs. lakh Cr.)
|Total Expenditure (A)
|Fiscal Deficit (A-B)
|Fiscal Deficit as a % of GDP
|Nominal GDP growth (%)
|‘Direct Benefit Transfer’ of Rs. 34 lakh crore from the Government using PM-Jan Dhan accounts has led to savings of Rs. 2.7 lakh crore for the Government.
|To benefit MFIs and SFBs who lend to people at the bottom of the pyramid.
|Gross borrowing of Rs. 14.1 trn and net borrowing of Rs. 11.8 trn announced.
|This is better than expectations and bond yields have reacted positively to this announcement. Likely to benefit Banks and NBFCs and PSU Banks in particular.
|83 lakh SHGs with 9cr women are transforming the rural socio-economic landscape. Their success has assisted nearly 1cr women to become Lakhpati Didi already. It has been decided to enhance the target for Lakhpati Didi from 2 crore to 3 crore.
|To benefit MFI’s and SFBs who lend to people at the bottom of the pyramid.
|MoRTH budget allocation remained flat at Rs. 2.78 lakh cr v/s Rs. 2.70 lakh cr FY24BE.
|Neutral impact for road EPC construction companies
|Implementation of PM Awas Yojana (Grameen) continued despite COVID-19, and the government is close to achieving the target of 3cr houses. 2cr more houses will be taken up in the next 5 years to meet the requirement arising from an increase in the number of families.
|Positive for EPC, Building material players such as Paints, Pipes, FMEG and affordable HFCs
|Metro Rail and NaMo Bharat can be the catalyst for urban transformation. Expansion of these systems will be supported in large cities focusing on transit-oriented development.
|To benefit infrastructure and related entities
|Continuation of a 50-year interest-free loan to States with capital outlay worth Rs. 1.3 lakh cr
|This will benefit infrastructure companies dependent on state capex
|Railway budget outlay increased to Rs. 2.55 lakh cr. vis-à-vis Rs 2.4 lakh cr. In FY24 BE.
|To benefit railway-focused companies.
|40,000 Railway bogies to be converted to Vande-Bharat Standards.
|Positive for domestic Railway coach manufacturers and players in the railways component eco-system.
|Focusing on developing 3 Rail corridors:
1) Cement, Mineral, and Energy,
2) Port connectivity, and
3) High Traffic Density corridor.
|Positive for domestic Railway-focused companies and players in the last mile logistics. This will lead to an improved share of Railways in the transportation of Goods within the country.
Agri and Food Processing
|Fertilizers subsidy for FY25 reduced by ~13% to Rs. 1.64 lakh cr over RE FY24. In FY24, the government had budgeted ~Rs 1.75 lakh crore but raised allocation, and revised estimates were ~Rs 1.88 lakh crore.
|Negative for Fertilizer companies.
|Increased usage of Nano-DAP to be expanded in all Agro-climatic zones.
|Positive impact on the fertilizer stocks that are in the manufacturing of Nano-DAP.
|A comprehensive program for supporting dairy farmers will be formulated, built on the success of existing schemes.
|Improve dairy sector productivity and benefit the entire dairy value chain. Positive for the Dairy sector
|Strategy to achieve ‘atmanirbharta’ for oil seeds such as mustard, groundnut, sesame, soybean, and sunflower. This will cover research for high-yielding varieties, widespread adoption of modern farming techniques, market linkages, procurement, value addition, and crop insurance.
|Initiatives to improve the production and processing of oilseeds will help reduce dependency on imports. Positive for Agri and FMCG sectors.
|Pradhan Mantri Matsya Sampada Yojana (PMMSY) to be stepped up – This will enhance aquaculture productivity from existing 3 to 5 tons per hectare, double exports to Rs. 1 lakh cr. and generate 55L employment opportunities. Five integrated aquaparks will be set up. Increased allocation for Blue Revolution to Rs.2.3k crore in FY25 (BE) vs Rs.1.5k cr in FY24 (RE)
|Positive for the fisheries and aquaculture sector
|Increased allocation for PM-Formalisation of Micro Food Processing Enterprises scheme to Rs.880cr vs Rs.800cr (FY24 RE). Allocation in FY24 (BE) was Rs.639cr.
|Positive as it reduces post-harvest losses and enhances productivity and incomes.
|Payment security mechanisms will encourage the adoption of e-buses for public transport networks.
|Positive for auto OEMs manufacturing E-buses and some auto-ancillary companies.
|Expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure.
|Positive for players in the EV ecosystem, including those involved in the charging infrastructure.
|FAME subsidy expenditure for FY25 was reduced by ~44% to ~Rs. 26.7 bn from ~Rs 48 bn in FY24 (BE).
|Negative for EV OEMs, the reduction is mainly due to the reduction in the E-2W subsidy announced in May’23. This might delay the penetration of EVs.
Travel and Hospitality
|Projects for port connectivity, tourism infrastructure, and amenities will be taken up in islands, including Lakshadweep. States will be encouraged to undertake the development of iconic tourist centres to attract business and promote opportunities for local entrepreneurship. Long-term interest free loans to be provided to States to encourage development.
|Favorable and will facilitate convenience in domestic travel. Positive for hotel, aviation, and travel hospitality related sectors.
|Expansion of existing airports and development of new airports will continue expeditiously under the UDAN scheme.
|Defence sector outlay was at Rs. 6.2 lakh cr. for FY25 (from Rs. 5.94 lakh cr. in FY24)
|While the defence sector received the highest sectoral allocation this year, the allocation increased by only 4.4% YoY in FY25, much less than last year’s growth of 13% YoY. Positive for the sector.
|New scheme for strengthening deep-tech technologies for defence and expediting Atmanirbharta to be launched.
|The scheme aligns with the government’s push towards bolstering Atmanirbharta in defence by fostering advancements in building cutting-edge technologies that hold immense potential for boosting indigenous defence capabilities and enhancing national security.
Healthcare and Well-being
|Allocation towards Health and Family Welfare saw a marginal 1.7% increase to Rs. 90,659 cr.
|Allocation was less and reflects low priority in the current budget.
|Jan Aushadhi Scheme allocation increased significantly from Rs. 115 cr. in FY24 to Rs. 284 cr. in FY25.
|Reiterates the government’s continued focus on increasing cost-effective generic drug sales. Positive for companies with generics drug portfolio.
|Plans to set up more medical colleges by utilizing existing hospital infrastructure. A committee will be formed to evaluate the matter.
|It will aid in improving India’s healthcare services and address the concerns around shortages of skilled healthcare workforce.
|U-WIN platform for immunization efforts of Mission Indradhanush to be rolled out
|U-WIN, a one-stop digital platform apart from maintaining an electronic registry of vaccinations and immunization programs, will also result in timely vaccine administration by sending alerts and better management of vaccine distribution.
|Encourage Cervical Cancer Vaccination for girls (9-14 years) for prevention.
|In India, cervical cancer is the second-most common cancer among women, and India accounts for nearly a quarter of all cervical cancer deaths in the world. This announcement is positive as it will help in tackling the rising cases.
|Ayushman Bharat will cover all workers under the ASHA and Anganwadi schemes.
|Ayushman Bharat, the largest publicly funded health insurance scheme in the world, continues to benefit vulnerable sections of the country with its comprehensive coverage.
|All maternal and child healthcare schemes will be brought under one comprehensive scheme. Improve nutrition delivery, early childcare, and development.
|Positive for OTC players and companies focusing on maternal / child segments.
|PLI for White goods (AC and LED Lights) has increased 4 folds to Rs. 3 bn from Rs 650 mn BE FY24.
|Beneficial for the AC manufacturing companies who have received PLI scheme approval from the government.
|PLI for Large-Scale electronics has increased by 36.4% YoY to Rs. 61bn from Rs. 44 bn in FY24.
|This is positive for players who are into manufacturing large-scale electronic products, given they are approved for the PLI incentive scheme.
|PLI for IT hardware has increased by 6.5% YoY to ~Rs 750 mn from Rs. 704 mn RE FY24.
|This would benefit EMS players manufacturing Laptops, Tablets, and other IT hardware devices.
|Auto PLI has been allocated Rs 35 bn, a more than 7x increase YoY from FY24 BE of Rs. 4.8 bn.
|Positive for the Auto OEMs as well as for auto ancillaries.
|Battery PLI has been allocated ~Rs 2.5 Bn vs Rs 0.1 bn in BE FY24.
|Beneficial for battery makers. Currently, capacities are being set up and will ramp up across FY25; hence, allocation is slightly lower.
|Modified program for the development of semiconductors and display manufacturing. Budget allocation has increased to ~Rs. 65 bn vs Rs. 15 bn in FY24.
|This would be beneficial for EMS players engaged in manufacturing semiconductors.
|Pharma PLI budget estimates almost doubled to Rs. 21 bn in FY25 from Rs. 12 bn budgeted in FY24.
|Positive for Indian Pharma Companies.
|PLI Scheme for the Food Processing Industry has increased 26% to Rs.1,444cr from Rs.1,150cr (FY24 RE)
|Positive for enhancing the food processing sector
|A coal gasification and liquefaction capacity of 100 MT will be set up by 2030. This will help reduce imports of natural gas, methanol, and ammonia.
|Positive for companies setting up plants for coal gasification
|Research & Innovation: A Corpus of rupees one lakh crore will be established with a 50-year interest-free loan. It will provide long-term financing or refinancing with long tenors and low or nil interest rates.
|The aim is to encourage the private sector to significantly scale up research and innovation in sunrise domains. The funding will strengthen R&D and aid in improving India’s position globally as a technology leader.
|Allocation to Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGA) flat in FY25 (BE) at 86k cr. The original allocation in FY24 (BE) was 60k cr.
|Tax incentives and exemptions for start-ups and investments by sovereign wealth or pension funds are extended for one year.
|Withdrawal of outstanding direct tax demand: Up to Rs. 25,000 pertaining up to FY10Up to Rs. 10,000 for FY11-FY15
|Positive and expected to benefit ~1 cr. taxpayers
|Renewable Energy 1 crore households can obtain up to 300 units of free electricity per month. The total outlay for this is expected to be around ~Rs 100 bn.
|Beneficial for players in the solar ecosystems.
|Viability gap funding for offshore wind energy up to 1GW capacity.
|Positive for the wind energy players, the turbine manufacturing space, EPC space, etc.
|Mandating Compressed Biogas (CBG) blending with CNG and PNG in a phased manner to reduce imports of LNG.
|This would have a neutral impact on City Gas Distribution companies.