Union Budget 2024: Here’s what you can Anticipate.

Raising the level of anticipation, President Droupadi Murmu recently proclaimed in her address to the joint session of Parliament that the prospective Union Budget would be “historic” and would strive to bring about both economic and social reforms. This grand proclamation has burned a flurry of speculation and generated high expectations across all parts of society, as people eagerly await the unveiling of Sitharaman’s latest plan for India’s profitable and social transformation.

Nirmala Sitharaman is set to make history by presenting her seventh consecutive Union Budget on July 23, eclipsing the previous record held by Morarji Desai, who presented six budgets from 1959 to 1964. Sitharaman’s milestone underscores her remarkable tenure as India’s Finance Minister and her steadfast leadership in steering the country’s economic policies.

India’s Profitable Economic Growth

India’s economy is riding high on a momentum of robust growth, with an impressive eight per cent growth rate in FY24 and a projected seven per cent growth rate in the current fiscal year. This remarkable growth is being driven by stellar performances in key sectors such as manufacturing, electricity, and construction, buoyed by increased government expenditure and strong domestic consumption, all of which are contributing to India’s economic resilience and fortitude.

Chief Economic Adviser V Anantha Nageswaran has emphasised that to maintain the remarkable seven per cent development rate or advance for the fourth successive time in FY25, favourable monsoon conditions are pivotal.

The Progress in Financial-Deficit Reduction

In FY24, India’s fiscal deficit landed at a more manageable level of ₹16.54 lakh crore (5.6% of GDP), which was lower than the revised estimate of 5.8%. Encouragingly, the Central Government’s net duty reciepts reached an impressive figure of ₹23.27 lakh crore, surpassing the target by an estimable 100.1%. Total expenditure also showed signs of restraint, being only 99% of the target at ₹44.43 lakh crore, illustrating an estimable degree of financial prudence.

With a decrease in the financial shortage, the government’s funds have illustrated a promising degree of stability, paving the way for potential tax relief measures while ensuring a steady trajectory towards fiscal consolidation.

High GST collection:

In a surprising accomplishment, the Goods and Services Tax( GST) collections in June 2024 took off to an each- time high of ₹1.74 lakh crore, checking a noteworthy 8% growth over the time. The first quarter of FY24 (April-June) marked a watershed moment with GST collections soaring to an unprecedented ₹1.86 lakh crore, the highest since the launch of GST in 2017. This significant achievement showcases India’s robust economic performance and improved compliance with the tax regime.

The robust growth in earnings has created fresh headroom for expenditure to increase in the forthcoming budget. With the government exercising restraint in FY 23- 24 and expenditure growth directing to its most reduced position in nearly two decades, the experts believe there’s now compass for a significant rise in government spending. The recent election results, experts argue, will further incentivize the government to expand its expenditures, using the profit overpluses while continuing to work towards its target of financial connection.

Increased Backing for Capital Expenditure:

Industry experts, including Alok Agarwal, Head of Quant and Fund Manager at Alchemy Capital Management, anticipate that the forthcoming July 2024 Union Budget might give raised backing for capital expenditure( Capex) in crucial sectors, similar as roadways, rail, and indeed state loans. The suggestion points to potential fiscal space that the government could utilize to further boost investments and economic growth. In his analysis, Agarwal states that the overall growth in Capex could rise by a noteworthy 20- 25% compared to the former financial year, representing a substantial boost from the 17 expansion outlined in the February 2024 interim budget.

The implicit swell in Capex investment indicates the government’s commitment to profitable growth and structure development, which could appreciatively impact various sectors and the country’s economy as a whole.

Increased Fiscal Support for Small and Medium Enterprises:

According to Ankit Verma, the head of Air8 in India, the government’s plan to expand the production-linked incentive (PLI) scheme for small textile enterprises is a promising initiative that could prove pivotal in reaching the ambitious target of $50 billion in garment exports by 2030. However, further measures are demanded to truly empower these businesses and enable them to reach this goal.

Verma stresses the significance of furnishing affordable backing to SMEs, counting the availability of tab factoring services and accessible trade backing installations, to alleviate transnational buyer pitfalls and facilitate modernization, growth, and global competitiveness.

Make in India:

According to Ramesh Alluri Reddy, CEO of TeamLease Degree Apprenticeship, the forthcoming budget is anticipated to align with the Modi3.0 government’s focus on elevating India’s global profitable standing. Strategic activities, like the Make in India campaign, PLI scheme, Skill India Mission, and Digital India program, will play a pivotal role in boosting domestic industries across various sectors. Investments in capability structure, including mortal capital, structure, and education, will serve to support the foundations for India’s progress.