The Finance Minister Nirmala Sitharaman presented the Union Budget for the year on 23 July, 2024. While the proposals put forth will impact the Indian economy at large, the 2024 Budget will also indirectly benefit several sectors that are a part of Visakhapatnam and its economy. Based on the proposals made in the Union Budget 2024, here’s how the following sectors in Vizag will be impacted:
Fisheries
In 2023-23, Visakhapatnam Port – the largest fishing harbour in Andhra Pradesh – led the country in marine cargo exports, with seafood exports valued at ₹17,989 crore, representing approximately 29.7% of India’s total marine cargo exports. It goes without saying that Visakhapatnam, with its place right by the shores of the Bay of Bengal, relies majorly on fishing. The key proposals outlined in the Union Budget 2024-25 that may benefit the fisheries sector include:
Reduction in Basic Customs Duty: The duty on essential inputs for the fishing industry, including broodstock, polychaete worms, shrimp, and fish feed, has been reduced to 5%. Additionally, inputs used in the manufacture of shrimp and fish feed will be exempt from customs duty. This will lower production costs and increase profit margins for fishermen and seafood companies.
Financial Support for Shrimp Farming: A network of Nucleus Breeding Centres (NBC) for high-quality shrimp broodstock will be established. These facilities will improve genetic quality, enhance productivity, and reduce reliance on imported shrimp broodstock. Financial support for shrimp farming, processing, and export will be facilitated through NABARD.
Increased Allocation for PMMSY: The Pradhan Mantri Matsya Sampada Yojana (PMMSY) allocation has been increased to ₹2,352 crore, a 56% rise from the previous year’s ₹1,500 crore. This funding could support various initiatives aimed at improving the fisheries sector in Visakhapatnam.
Ports
Visakhapatnam Port, one of the largest cargo handling ports in India, along with Gangavaram Port, is set to benefit significantly from the Union Budget 2024-25. The Finance Minister announced two major initiatives aimed at bolstering the maritime economy:
- Reforms in Ownership, Leasing, and Flagging: Reforms in ownership, leasing, and flagging aim to increase the share of the Indian shipping industry and create more employment opportunities. These measures will strengthen the domestic shipping industry, making it more competitive globally.
- Tax Incentives for the Cruise Industry: A presumptive taxation regime for cruise ship operations of non-residents and tax exemptions for income from lease rentals of cruise ships received by foreign companies will boost the domestic cruise industry. These incentives aim to attract more cruise operations to Indian waters, enhancing tourism and generating employment.
- Simplified GST for export competitiveness: GST is to be simplified and standardised to improve export competitiveness and lessen the production costs, improving competitiveness of India’s shipbuilding and repair industry.
Pharmaceuticals
From hosting the world’s largest medical technology cluster, the AP Medtech zone, to several other phrama companies including Divis’ Labratories, Solara Active Pharma, and more – Visakhapatnam stands to benefit from incentives for the pharmaceutical sector:
- Increased Healthcare Funding: With an allocation of Rs 89,287 crore for healthcare, local hospitals and healthcare centers in Visakhapatnam can expect better resources, improved infrastructure, and increased access to essential services.
- PLI Scheme for Pharmaceutical Manufacturing: The Rs 2,143 crore allocation for the PLI (Production Linked Incentive) scheme is expected to stimulate pharmaceutical manufacturing in Visakhapatnam, fostering economic growth and job creation.
- Customs Duty Exemptions: The exemption of additional cancer medications and the proposed changes in the basic customs duty on x-ray tubes and flat panel detectors will make treatments more affordable and improve diagnostic capabilities in Visakhapatnam.
- Research and Innovation: The operationalization of the Anusandhan National Research Fund and the establishment of a Rs 1 lakh crore financing pool for private sector-driven research will drive medical innovation in Visakhapatnam.
Steel
With the Visakhapatnam Steel Plant located here, the Union Budget’s measures to support the steel industry may prove beneficial:
- Removal of Customs Duty on Ferronickel: The 2.5% basic customs duty on the import of ferronickel, a key raw material for stainless steel, has been removed.
- Zero Customs Duty on Critical Minerals: Twenty-five critical minerals will attract zero basic customs duty, and ferrous scrap will continue to be exempt from customs duty until March 31, 2026.
- Increased Allocation for Infrastructure Development: The allocation of Rs 11.11 lakh crore for national infrastructure projects will enhance demand for steel, benefiting steelmakers in Visakhapatnam.
Defence
Visakhapatnam plays a strategic role in India’s defence sector, as Indian Navy’s Eastern Naval Command fleet is located here. The Union Budget 2024-25 allocates Rs 6,21,940 crore for the defence budget, an increase from the previous year’s Rs 5.94 lakh crore:
- Domestic Capital Procurement: The allocation of Rs 1,05,518 crore for domestic capital procurement will promote self-reliance in the defence sector.
- Customs Duty Exemption on Critical Minerals: The exemption on essential materials like lithium, cobalt, and copper will significantly impact sectors including nuclear energy, space, defence, and telecommunications.
With Andhra Pradesh being a part of “Purvodaya”, a plan proposed in the Budget 2024 for the all-round development of Eastern India in aspects like human resource development, infrastructure, and the generation of economic opportunities, Visakhapatnam can surely expect some accelerated growth benefits in these areas as well.
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