Interim Budget 2024: what to watch out for in India’s Interim Budget.
The Interim Budget for the year 2024-2025, which is essentially a financial plan to keep the government running until a new government takes over, is scheduled to be presented by the Finance Minister, Nirmala Sitharaman, in Parliament on February 1, 2024, expectations are a little high from everyone’s end.
KEY DATES TO REMEMBER:
February 1, 2024: Presentation of the Interim Budget by the Finance Minister
April 1st, 2024: Start of the new fiscal year
May-June 2024: Expected time frame for the new government to present the full budget.
While global growth prospects remain subdued, India is expected to clock a 7% growth in FY24 led by its resilient domestic demand. The GoI will have the task of sustaining medium-term growth i.e., restoring fiscal consolidation while prioritizing capital expenditure in FY24-25.
A vote on account is presented to Parliament during an election year to cover expenditure for a brief period. After the parliamentary polls are over and a new government is formed, a regular budget for the 2024-25 financial year will be presented. The interim budget keeps the government functioning in the meanwhile. Funds made available under the vote on account cannot be utilised for expenditure on any new service.
As this is the year of General elections, a full-fledged Budget will be tabled after the Lok Sabha elections later this year.
Budget 2024 Expectations:
The government will target a lower deficit in the 2024-25 fiscal year despite lifting capital expenditure to an all-time high, according to a poll of economists.We can see an announcement of a series of developments aimed at boosting consumption, more allocation towards the defense sector and infrastructure development, the introduction of reform policies to ensure a level playing field for manufacturers, and a dedicated focus on the agricultural sector,More private sector agri investments and and the goal of building a $5 trillion economy.
It will also emphasize the government’s economic vision for women, youth, farmers, and the poor. No major new schemes are expected, but there may be adjustments to direct taxes and customs duties. The government is also prepared to take pre-emptive measures to control inflation caused by supply disruptions due to geopolitical reasons.
Personal tax amendments: India’s tax reforms may see a rise in the standard deduction from INR 50,000 to INR 1,00,000. The TDS under section 194A on PF interests over INR 2.5 lakhs may be deferred until employment cessation, while clarity on TCS payments impact on tax withholding is anticipated.
Ayushman Bharat coverage may be hiked from Rs 5 lakh to at least Rs 10 lakh per family & Upcoming budget may focus to strengthen healthcare in rural areas.
Rural jobs scheme may get 47% higher outlay of Rs 88,000 crore.Budget presents an opportunity to reform IGST for the healthcare system.
Extension of the FAME subsidy and removing all caps on the ex-factory price of EVs would greatly enhance our position, An opportunity to double down on renewables.
Electronics industry calls for reducing GST on all LED TVs above 32″ to 18%.Less import duty, more export opportunities for TV players.
The budget for the retail sector may bring strategic interventions that support small businesses, promote digital adoption, and enhance consumer confidence for a resilient retail ecosystem.the Union Budget 2024 will play a crucial role in setting that ball in motion and expects to see some innovative initiatives and policies that can accelerate and catalyze the sector.
Pushing the envelope towards ‘Making for the World’:
In India’s manufacturing-led transformative narrative, if there is one initiative that has hit home, it is the Production Linked Incentives (PLI) scheme. Covering 14 sectors with an initial allocated outlay of $27 billion, it captures the combined visions of ‘Make in India’ and ‘Atmanirbhar Bharat’ and takes it several notches higher to ‘make for the world’.
