With India poised to become a $5 trillion economy within the next three years, all attention is on the upcoming Union Budget 2024-25. There is a strong sense of anticipation across industries, as businesses are hoping for policies that can drive the nation’s economic growth beyond its current 6.7% annual trajectory. The budget is viewed as a crucial opportunity to generate jobs, tackle urgent challenges, and lay the groundwork for India’s ongoing economic advancement.
Finance Minister Nirmala Sitharaman will table the government’s first budget of Modi’s third term on July 23, providing an early look at potential changes in economic policy. The new budget will replace the interim estimates for the 2024/25 fiscal year, which began on April 1.
Tech giants are calling for increased government investment. A key priority is R&D in Artificial Intelligence (AI), which has the potential to revolutionise industries like recruitment with AI-powered talent matching platforms. Revitalising digital infrastructure and supporting the burgeoning field of financial technology (fintech) are also high on the wishlist. Expanding the reach of Unified Payments Interface (UPI) is a specific expectation, aiming to streamline financial transactions, while robust investments in cybersecurity infrastructure are crucial to handle the ever-increasing data volumes and complexities of cyber threats.
The upcoming budget is expected to tackle the skills gap challenge between academia and industry by promoting programmes that equip young people with in-demand skills for booming sectors like technology (e.g., coding), electric vehicles (e.g., battery technology), healthcare, and e-commerce. Investments in digital skills training programs, STEM education, and vocational training are anticipated to prepare the future workforce for the demands of these emerging industries.
Infrastructure development, crucial for economic growth, will likely see continued investment in large-scale projects. However, a key trend of growing emphasis is on developing tier-2 cities as vibrant hubs for Global Capability Centers (GCCs). This could involve creating advanced infrastructure in these locations, making them more attractive for companies to establish or expand their centres. This focus on tier-2 cities could also help address the skilling challenge by creating new job opportunities and encouraging the development of relevant skills training programmes in these regions.
The semiconductor industry, crucial for sectors like healthcare and consumer electronics, is awaiting announcements, particularly in areas like chip design or fabrication facilities. The MSME sector is hoping for schemes that enhance supply chains, strengthen manufacturing capabilities, improve access to capital, and reduce compliance burdens. The expansion of the Production Linked Incentive (PLI) scheme to encompass more sectors could be a game-changer for manufacturing.
Sustainability, a global concern, is expected to remain a key focus area for the government. The budget is likely to include incentives for renewable energy projects, electric vehicles, and green fintech initiatives.
The financial services and insurance sectors expect measures to enhance market depth, and a reduction in the GST on life insurance products, along with aligning life insurance annuity or pension products with the National Pension Scheme (NPS) to simplify saving options and offer better returns, making them more accessible to a wider segment of the population.
The implementation of adaptable labour codes, particularly those that address greater flexibility in hiring practices or streamlined dispute resolution mechanisms, is a key expectation. Initiatives to increase women’s participation in the workforce and support for formal job creation opportunities are high on the agenda. Companies in the staffing and HR sector emphasise the need for reforms that create a more dynamic HR landscape, adaptable to the rapidly evolving economic environment.
What HR industry want from the 2024 Budget
The HR industry experts emphasise the need for investments in skill development, increased women’s workforce participation, and reforms to create a more dynamic HR landscape.
The HR industry experts highlight the need for investments in skill development, increased women’s workforce participation, and reforms to create a more dynamic HR landscape. Sachin Alug (NLB Services) and Sandeep Chaudhary (PeopleStrong) both highlight the importance of skilling the youth to meet the demands of growing sectors and bridge the gap between academia and industry. Devashish Sharma (Taggd) underlines this point by referencing the high youth unemployment rates. He, along with Jasvinder Bedi (Biz Staffing Comrade), also emphasises the need for government initiatives to increase women’s participation in the workforce.
Sandeep Chaudhary, CEO, PeopleStrong: We hope the Government will prioritise investments in skill development, employment generation, the startup ecosystem, and sustainable development sectors. With India’s economy projected to reach the $5 trillion mark, it is crucial to channel substantial investment into transforming Tier 2 & 3 towns into economic hubs, formalizing labour participation, and increasing female workforce participation.
Sachin Alug, CEO, NLB Services: We anticipate the Union Budget 2024 will emphasise investments in human capital, infrastructure, sustainable job creation, education, and increasing women’s workforce participation to drive economic growth. A notable focus will be upskilling, with a projected 20-25% increase in budget allocation for skill development and entrepreneurship.
Devashish Sharma, CEO & founding member, Taggd: The current unemployment rates specifically 10% for youth, 13.8% for urban males, and 21.7% for urban females – underscore the urgent need to equip our youth with in-demand skills for booming sectors like Semiconductors, EV sector, manufacturing, AI/ML in IT/Tech. We see a critical opportunity to bridge the academia-industry divide. We are optimistic about the special initiatives for the MSME sector, which contributes nearly 30% to India’s GDP.
Jasvinder Bedi, Managing Partner, Biz Staffing Comrade: With a stronger GDP forecast, the job market appears poised for stability and potential growth. We anticipate the Union Budget 2024 will focus on employee welfare, taxation, formal job creation, simplifying compliance, updating labour codes, and addressing the skill gap.
Upskilling and reskilling needs have surged, particularly in technology. The upcoming budget should prioritise job creation and align skills with emerging market demands.
Manikanth Challa, Founder & CEO, Workruit: In recent years, the integration of AI and machine learning has revolutionised the hiring process, making it more efficient, inclusive, and accessible. Our expectations from this budget are centred on continued support for digital infrastructure and technology-driven solutions that can streamline recruitment and foster entrepreneurial growth.
As the budget unfolds, it will be interesting to see how these expectations are addressed and how the government navigates the intricate interplay of economic growth, job creation, and fiscal management in an increasingly competitive global landscape.