Post-Budget LIVE: FM dismissed inflation ‘in 10 words’: Chidambaram in RS

INDIA bloc parties, led by the Congress, staged a walkout from Rajya Sabha on Wednesday in protest against all states except two being “ignored” in the Budget, an allegation termed “outrageous” by Finance Minister Nirmala Sitharaman, who said all the states never found a mention in any of the previous Budgets, including those presented by the Congress.

After Chairman Jagdeep Dhankhar rejected notices under Rule 267 that called for the suspension of the listed agenda to take up the issue, Leader of Opposition and Congress president Mallikarjun Kharge said the Union Budget for the 2024-25 (April 2024 to March 2025) fiscal year provided funds and schemes for only two states — Bihar and Andhra Pradesh.

None of the other states found any mention, he said, terming the budget a “kursi-bachao” (save your seat) document. Kharge said the Congress and the other INDIA bloc parties “condemn” this discrimination.

As Dhankhar gave Sitharaman the floor to respond, Kharge led the Opposition bloc out of the House, saying they were walking out in protest.

The finance minister said she did not name many states even in the Interim Budget presented in February ahead of the general election or in the full budget tabled in Parliament on Tuesday, but that does not mean that government schemes are not working for the states.

She cited the example of Maharashtra, which was not named in either of the Budgets, and said that did not prevent the Union Cabinet from approving the Rs 76,000-crore Vadhavan port project in Dahanu in the state last month.

“Did Maharashtra get ignored because I did not mention the name of Maharashtra? (An amount of) Rs 76,000 crore has been announced for that project,” she said.

Sitharaman said she can go on to cite several other states that have got major projects.

“If the speech does not mention the name of a particular state, does it mean that the schemes of the Government of India, the programmes of the Government of India, the externally-aided assistance which we obtain from the World Bank, ADB, AIIB and institutions like that do not go to these states? They go as per a routine,” she said.

The expenditure statement of the government gives out the item-wise allocation, the finance minister pointed out. “This is a deliberate attempt of the opposition parties, led by the Congress, to give an impression to people that ‘oh, nothing has been given to our states, it has only been given to two states’. I would challenge the Congress for all the Budget speeches they have delivered, that in each of the Budget speeches, have they named every state of the country? This is an outrageous allegation”, she said, adding that it is “not acceptable”.

As the MPs belonging to Opposition parties returned to the House, the finance minister said the Trinamool Congress (TMC) had raised questions on Tuesday about nothing being given to West Bengal in the Budget, but the fact is that several schemes launched by Prime Minister Narendra Modi in the past 10 years have not been implemented in the state.

Her statement was met with vociferous opposition from the TMC members, who said the BJP-led Centre owes Rs 1 lakh crore to West Bengal.

Dhankhar said 20 hours have been allocated for a discussion on the General Budget and the MPs as well as the finance minister will get adequate time to raise issues and respond.

Discussion on Union Budget starts in the Lok Sabha. Senior Congress MP Kumari Selja opens the discussion from the Opposition's side.

Devam Sardana, Business Head, Lemonn: “A lot of people are asking about the impact of STT, STCG and LTCG on the equity market participants but instead of the impact of direct factors, I believe the removal of indexation benefits on real estate, gold, etc. will have a major impact on the equity markets and participants (and that too a positive one). From a real estate standpoint, I see 3 major things: Secondary market for real estate will be hit as sellers will be unwilling to absorb the full impact of the potential tax increase (no indexation benefits). Buyers looking to invest in property (beyond residential use) will step back a bit. The government recognises this and has therefore “urged” states to reduce stamp duties. Potential cash transactions or share of cash in real estate might increase, leading to increased scrutiny of real estate transactions. Overall, this makes real estate as an asset class less attractive compared to pre-Budget rules. Of course, if one is looking to re-invest capital gains from real estate in another property, there is no change for them. With regards to the question on STT, STCG and LTCG, there is minimal impact on the equity markets but when looked at the competitors of equity as an asset class namely gold, real estate, investors can breathe a sigh of relief!”

Tarun Singh, Managing Director of Highbrow Securities: “The Union Budget has impacted the buoyant stock market, but its effect feels more symbolic than substantial. The fundamental impact on investors will be negligible, as any changes in capital gains taxation will soon be factored into future plans. The market sentiment will remain conducive for investors. The budget’s incremental yet pivotal steps towards fostering an inclusive manufacturing and MSME landscape are commendable. The proposed initiative lays a sustainable and secure foundation for investors to explore emerging opportunities within this vital economic segment. One of the key standout aspects of this budget is its respect for the existing consumption patterns. In the market realm, consumption is king, and any disturbance to this trend could ripple negatively across the economic spectrum. By preserving the status quo here, the budget has safeguarded the ongoing consumption story that fuels market growth. The Stock Markets, thus, can absorb minor setbacks and continue on a bullish path, backed by stable and robust consumer demand.”

Ashish Singhal, Co-founder, CoinSwitch: “We welcome the Union Budget 2024-25 as a pro-development budget bringing great news for startups. As a founder and angel investor, I’m thrilled that the Angel Tax has been abolished. This will significantly bolster the entrepreneurial ecosystem in India. The emphasis on digital public infrastructure and the digitalization of the economy will greatly benefit tech startups like ours, which are focused on developing population-scale apps for Indians.”

Himanshu Kohli, Co-founder, Client Associates: “Similar to previous budgets by this government, the emphasis remained on responsible fiscal management and increased investment in capital expenditure… The government reaffirmed India’s strong macroeconomic fundamentals despite a challenging global economic environment. Therefore, the critical priority areas laid down in the budget were all geared towards promoting the economy's long-term growth, which is also inclusive. While changes in the capital gains tax may have a short-term impact on the markets, they are expected to contribute to a more rational investment environment in the long run.”

Harsh Gahlaut, Co-founder & CEO, FinEdge: “Individual tax payers have reasons to rejoice with more money in their hands. With Standard Deduction being hiked from 50,000 to 75,000 and a change in tax slab under the new regime, the average taxpayer would be able to save Rs.17,500 in taxes. The increase in Long Term Capital Gains from 10% to 12.5% and STCG from 15 to 20% will affect the post-tax returns for investors, however, the silver lining comes from exemption on LTCG being increased from 1 lac to 1.25 Lacs.”

The increased funding for R&D announced in the Budget and the support extended to startups and MSMEs will foster innovation in steel manufacturing, the apex industry association said on Wednesday.

Furthermore, the allocation of Rs 11.11 lakh crore is set to enhance national infrastructure, create millions of jobs, and directly benefit the steel industry, the Indian Steel Association (ISA) said in a statement.

Jindal Steel and Power Ltd (JSPL) Chairman Naveen Jindal said, “The initiatives … reflect fiscal prudence and also promise inclusive development for our country.”

TV Narendran, CEO & MD, Tata Steel, said as a key component of all such infrastructure development, steel will see increased demand, particularly with the enhanced budgetary allocation for housing and water supply.

“We also commend the government’s intention to develop a roadmap for emission targets in ‘hard to abate’ industries. Government support is crucial for the successful transition of these industries. We await further details on the regulations pertaining to the Indian Carbon Market,” he said.

“The Budget includes pivotal provisions for the development of Andhra Pradesh's new capital, the Polavaram project, industrial nodes, and the backward regions of AP. These initiatives are expected to boost steel consumption in the region and drive regional development,” said Atul Bhatt, CMD of Visakhapatnam-based, RINL.

“The continued focus on accelerating the energy transition is also highly commendable. However, we remain hopeful that the government will take decisive actions to curb steel imports at predatory prices, which is a serious and immediate concern,” said Dilip Oommen, CEO, ArcelorMittal Nippon Steel India.

SAIL Chairman Amarendu Prakash said: “This commitment to enhance connectivity and build resilient infrastructure will not only drive steel consumption but also create a multiplier effect, benefiting various sectors and thereby contributing to the nation's overall economic prosperity.”

Kamdhenu Group CMD Satish Kumar Agarwal said the allocation of Rs 10 lakh crore for the construction of 1 crore houses for the urban poor and the announcement of variable gap funding support for the development of rental housing with dorm-like accommodation for industrial workers in (Public Private Partnerships) PPP mode will lead to a significant boost to the housing sector.