Union Budget 2024-25 Expectations

The upcoming interim budget on July 23rd marks a pivotal moment for the government. Serving as its final fiscal statement before the elections, it will be scrutinized for its response to the growing inflation concerns. November’s 5.55% YoY figure, a significant jump from October’s 4.87%, fuels taxpayer budget expectations for income tax relief. The question remains: will the government prioritize fiscal prudence or populist measures in this pre-election context?

However, inflation’s bite raises questions about whether further tax relief might be forthcoming. Taxpayers hoping for an increased standard deduction or adjustments to tax slabs under the new regime, particularly for lower-income brackets, will be watching the budget closely.

Think of it as a bridge loan, not a grand investment. While exciting proposals may be tempting, the government’s hands are tied. This budget will cover essential expenses, ensuring smooth operation until the next elected representatives chart a new course.

What to Expect Union Budget 2024-25?

Whether you are an industry expert, a business owner, or just someone who wants to know how it might affect your wallet, this year’s budget promises some interesting updates. Understand what to expect in budget 2024 across various sectors and taxation policies.

Income Tax

Direct Taxation

Direct taxation is always a trending topic during the budget season. This year, there’s speculation about possible changes to tax slabs to give the middle class some relief. The government might introduce new incentives for investments in certain sectors, like green energy or technology, to drive growth and sustainability. We’re also keeping an eye on potential reforms to simplify the tax filing process, making it more user-friendly and transparent.

Indirect Taxation

When it comes to indirect taxation, GST (Goods and Services Tax) is the big one. There might be tweaks in the GST rates for certain goods and services to boost consumer demand. The government is also expected to address the ongoing issues in the GST framework, like simplifying the compliance procedures and reducing the burden on small businesses.

Personal Taxation

For individual taxpayers, there’s always a hope for more exemptions and deductions. This year, there’s talk about increasing the standard deduction and offering more tax benefits on home loans and health insurance premiums. Another area of interest is the potential introduction of new tax-saving schemes to encourage savings and investments among the youth and the elderly.

Policy and Economy

The overall economic policy will likely focus on sustaining growth while keeping inflation in check. We can expect measures to boost infrastructure development, rural economy, and digitalization. The government might also unveil new policies to attract foreign investments and enhance the ease of doing business in India.

Industries

Agriculture

The agriculture sector, being the backbone of the Indian economy, is always in focus. We might see increased funding for modernizing agricultural practices, promoting organic farming, and enhancing the supply chain. There could be new schemes to support farmers, improve irrigation facilities, and ensure fair prices for their produce.

Consumer Industry

In the consumer industry, there could be incentives aimed at boosting domestic manufacturing and consumption. We might see initiatives to promote Made-in-India products, reduce import duties on essential raw materials, and encourage innovation in product development.

Education

Education is a critical area where we can expect significant announcements. The government might increase budget allocation for improving the quality of education, especially in rural areas. There could be new schemes for scholarships, vocational training, and digital education to make learning more accessible and inclusive.

Financial Industry

The financial sector is likely to see reforms aimed at strengthening the banking system, enhancing digital payments infrastructure, and promoting financial inclusion. We might also see measures to address the issues of non-performing assets (NPAs) and boost credit flow to MSMEs (Micro, Small, and Medium Enterprises).

Technology, Media & Telecommunications

In the tech and telecom sector, there could be initiatives to boost 5G rollout, support startups, and enhance cybersecurity measures. The government might also focus on expanding internet connectivity in rural areas and promoting digital literacy.

Insurance Sector

For the insurance sector, we can anticipate measures to increase penetration of insurance products, especially in health and life insurance. There could be new policies to encourage innovative insurance solutions and make insurance more affordable and accessible to the general public.

Fiscal Deficit

The fiscal deficit will be the focal point of all gazes. The Interim Budget presented in February adjusted the fiscal deficit estimate for FY24 from the original 5.9% of GDP to 5.8%. Balancing stimulus with fiscal prudence will be key, requiring the government to walk a fine line between spending for growth and maintaining a healthy financial footing.

Infrastructure

Expect continued focus on infrastructure development. Roads, railways, and digital connectivity will likely see generous allocations as the government aims to fuel economic growth and create jobs. This push aligns with the vision of “Amrit Kaal,” the period of nectar to come, as laid out by Prime Minister Modi.

Social Schemes

With elections on the horizon, social welfare schemes are bound to receive a boost. Rural development, poverty alleviation, and healthcare are likely to see increased allocations, seeking to attract voters and address critical needs. However, how this plays out remains to be seen, with the need to maintain fiscal responsibility also in the picture.

Taxation Updates

Changes in personal income tax slabs are less likely due to the political climate. However, some adjustments in exemptions or deductions may be on the cards.Indirect taxes like GST might see increased focus, aiming to broaden the tax base and improve revenue collection.

FAQs on Budget 2024 Expectations