Budget 2024 Likely To Be Focused On These 5 Themes

Finance Minister Nirmala Sitharaman is expected to table the Union Budget for the fiscal year 2024 in the Parliament on ...

Finance Minister Nirmala Sitharaman is expected to table the Union Budget for the fiscal year 2024 in the Parliament on July 23 or 24.

Earlier an interim budget was presented by Nirmala Sitharaman in February 2024 just before the Lok Sabha elections. After winning the elections third time in a row Modi governemnet is is set to present the the plan in which all the incomes and expenditures of the year 2024 will be presented.

As the nation eagerly anticipates the upcoming budget announcement, let’s delve into five themes that are expected to emerge prominently this time.

The first scheme is Consumption lift. The government is expected take steps to boost consumer spending by making tax adjustments. These changes could include increasing the standard deduction limit for taxpayers under the new tax regime, which offers lower tax rates but no exemptions, and possibly raising the exemption on income from bank interest.

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Other potential measures might involve reducing the personal income tax rate for those earning between Rs 5-15 lakh, which would cost the government about Rs 25,000 crore (0.08% of GDP). Additionally, the government might spend a similar amount by increasing the annual cash handout to farmers from Rs 6,000 to Rs 8,000.

The second focus is on Social sector. The government is expected to spend more on rural development programs. This includes increasing subsidies for housing by Rs 23,000 crore (0.07% of GDP) and boosting funds for rural roads and employment projects. Additionally, there are plans to expand the public health insurance program with an additional Rs 12,100 crore (0.04% of GDP). The government also aims to renew the economic empowerment program for women, known as Lakhpati Didi.

Third factor is boost in Manufacturing. The government plans to continue promoting domestic manufacturing. The budget might include raising the minimum local content requirement for public procurement. It could also bring back the 15% concessional corporate tax rate for new manufacturing facilities, which previously had a deadline of March 31. There might be an update to the 2019 national policy on integrating electronics into the global value chain, and the Production Linked Incentive (PLI) scheme could be extended to include electronic components and more labor-intensive sectors that involve small and medium-sized enterprises

Then there is expection in Infrastructure push. The government will continue to focus on public capital expenditure (capex) as a key part of its economic strategy. It plans to increase its total capex spending to 3.5% of GDP, up from the 3.4% in the interim budget. In response to states’ demands, the government might also increase the amount of the 50-year interest-free loan for infrastructure projects that is given without conditions.

Fifth is Medium-term economic vision. Since this is the first budget after the elections, it’s crucial for the government to outline its medium-term economic vision and reform agenda. It is anticipated that the government will present its vision for India becoming a developed economy by 2047, along with specific goals for the next five years. There are reports suggesting the government may introduce reforms that don’t need legislative approval. Additionally, the budget could offer more details on the medium-term fiscal path, aiming to keep the deficit below 4.5% of GDP by FY26.
#budget2024 #budget #unionbudget

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