Budget 2024: Volvo MD Kamal Bali praises measures for employment, skilling initiatives

Union Budget 2024-25: Kamal Bali, Managing Director of Volvo India, lauded the Indian government’s 2024 budget for its focus on employment generation and skilling initiatives, highlighting its potential impact on the manufacturing sector. In an exclusive interview, Bali stressed the comprehensive and growth-oriented nature of the budget presented by Finance Minister Nirmala Sitharaman.

Employment and Skilling Focus

Bali praised the government’s three employment-linked incentive schemes, which aim to provide a one-month wage to new entrants in all formal sectors, with up to Rs 15,000 in three installments. This initiative is expected to benefit two crore youth, significantly boosting employment in manufacturing and other sectors.

"The budget's focus on internships and employment generation is a very, very good step, especially for the manufacturing and automotive sectors. This will bring a tremendous leg up to both manufacturing and employment generation," said Bali. He compared the scheme to Germany’s successful model, which has propelled it to a leading position in automotive manufacturing.

Macro Stability and Fiscal Discipline

Bali also commended the budget for maintaining a fiscal deficit target of 4.9 per cent of GDP for 2024-25, down from the 5.1 per cent target set in the interim budget of February. He highlighted the importance of this reduction for macroeconomic stability, which he believes will foster an environment conducive to growth.

Tax Reforms and Market Reaction

The budget introduced several tax reforms, including higher taxes on equity investments and derivatives trading to curb speculative trading and address concerns of market overheating. The short-term capital gains tax on equity investments was increased to 20 per cent from 15 per cent, while the long-term capital gains tax was raised to 12.5 per cent from 10 per cent. Additionally, the securities transaction tax on futures and options trading saw significant hikes.

Consumer and Infrastructure Sectors

The budget allocated $32 billion for rural programs and $24 billion over five years to create jobs. It also earmarked funds for infrastructure projects and provided long-term loans to states linked to reform milestones in land and labour. Consumer stocks, in particular, benefited from the budget, with cigarette maker ITC seeing a significant surge. Conversely, infrastructure stocks such as Larsen & Toubro faced declines due to the absence of increased infrastructure spending in the budget.

(Source: Republicbiz)