Decoding the Union Budget FY24-25: Key Takeaways for the Manufacturing Sector
On July 23, 2024, Finance Minister Nirmala Sitharaman announced the final Union Budget for the financial year 2024-2025, including several measures to streamline and boost the manufacturing sector. The provisions of the budget focus on the industrial development, technological upgradation and sustainability of the flourishing manufacturing sector in India.
Continue reading to learn more about everything the Union Budget FY24-25 had in store for the sector and how it will impact future manufacturing activities in the country.
Infrastructure
The Union Budget FY24-25 allocated funds, especially for developing and upgrading the sector's industrial real estate infrastructure. The Centre has prioritised refurbishing and modernising existing industrial infrastructure like transit corridors, setting up new hubs, and increasing connectivity pan-India via robust road, rail and port networks. The injection of funds into the sector is expected to streamline supply chains, render logistics cost-effective, and put India on the global manufacturing map.
To give the manufacturing sector's infrastructure an additional boost, the budget also speaks to the establishment of multi-modal logistics parks all over the country. The parks will be designed to work in tandem with various modes of transport for seamless cargo movement. This network of parks is likely to increase the logistics sector's efficiency, directly impacting the nation's manufacturing industry by reducing the cost and time of transport.
Technological Advancement
The budget has also incentivised the adoption of advanced technology like automation, robotics and AI. Integration of such technology will help boost productivity, reduce the cost of operations and help achieve a standard of quality. The Centre has also allocated funds for research and development of new technology pertaining to this industrial development sector to encourage innovation. The budget has also pushed for greater sector digitisation and offered incentives for integrating 4.0 technology. Ultimately, the Centre aims to refine product quality and improve efficiency.
Sustainability
As per this year's budget, sustainability is the call of the hour. The budget has incentivised companies to adopt eco-friendly processes, renewable energy sources, energy-efficient technology and sustainable waste management. It follows international trends and emphasises the need for a circular economy, wherein recycling, reusing, and extending a product's life cycle is paramount. These measures aim to help companies reduce their carbon footprint.
Support for MSMEs
Over the years, the Micro, Small and Medium Enterprises (MSMEs) have significantly contributed to the nation's economy. As a result, the Centre has used the budget to increase their ease of business with measures like expanding the Credit Guarantee Fund, enabling MSMEs to avail of loans up to ₹100 crore to purchase equipment collateral-free. The budget has also delineated tax incentives for MSMEs, including lowered corporate tax rates, easy compliance processes, and a one-stop portal to make accessing government schemes easier for industrial development.
Upskilling and Employment
The budget has highlighted the need for a skilled workforce and increased allocations for skill development programmes, especially in sectors like AI, energy, and advanced manufacturing. These programmes will help supply the nation with skilled workers while helping employees meet the ever-evolving demands of industrial real estate. The Centre has also leveraged the Employees' Provident Fund Organisation to create employment skilling initiatives. These initiatives will help spot and incentivise first-time employees and offer a direct benefit transfer of one month's wage via three instalments. This initiative aims to help new workers integrate into the workforce and alleviate employment concerns.
The various initiatives outlined in the budget will culminate in significant growth for industrial development, helping establish India as a global leader in manufacturing and industrial real estate. If implemented effectively, the measures will address various challenges regarding credit accessibility, upskilling and unemployment, infrastructure congestion, and more.
At Lodha Industrial and Logistics Park (LILP), we've always strived to anticipate our clients' needs before they arise. In keeping with our legacy of innovation, we have set up Lodha Industrial and Logistic Parks to help business owners streamline their operations with freehold industrial plots. Investing in a manufacturing and industrial plot for sale at LILP allows businesses to optimise their efficiency, leverage world-class infrastructure, and create a sustainable working environment for their employees as compared to industrial plots in Bhiwandi, industrial plots near Mumbai, industrial plots in Taloja, industrial plots in Thane, industrial plots in Navi Mumbai, industrial land for sale in Panvel and other industrial land for sale in Mumbai. As one of the leading industrial park developers in India, LILP's industrial land for sale is a one-stop solution for varying business needs, from manufacturing and assembly to logistics and last-mile delivery, covering all essential features of the industrial park.