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Budget 2024: What to Expect from Union Budget 2024

The upcoming Union Budget for FY 2024-25 will be closely scrutinized for its fiscal deficit target, as the deficit already reached 39.3% of the full-year goal for FY23 by September 30, 2023.

  • 3,419 Views | Updated on: Apr 24, 2024

The upcoming interim budget on February 1st marks a pivotal moment for the NDA-2 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 expectations for income tax relief. The question remains: will the NDA-2 prioritize fiscal prudence or populist measures in this pre-election context?

Finance Minister Nirmala Sitharaman, in a recent address, declared the February 1st, 2024 presentation a mere “vote on account,” devoid of any “spectacular announcements.”

The reason for avoiding grand announcements in this budget is the upcoming election season. With Lok Sabha elections set for the summer of 2024, the government’s focus shifts from grand pronouncements to ensuring basic functionality. Following British tradition, this budget serves as a temporary measure, providing enough funds to keep the government afloat until a new administration takes the reins.

The introduction of the new income tax regime in February 2020 offered an alternative with lower tax rates. Budget 2023 significantly boosted this regime, making it more competitive with the traditional method through incentives and exemptions. These improvements have driven many taxpayers to consider switching over investment plans seriously.

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 in India’s Union Budget 2024?

As India steps into a new year, so does its anticipation for the annual Union Budget. Set for presentation on February 1st, 2024, this budget arrives amidst hope and uncertainty. With general elections looming on the horizon, the spotlight shines brighter than ever on what Finance Minister Nirmala Sitharaman has in store for the nation’s purse strings.

Fiscal Deficit

The fiscal deficit will be the focal point of all gazes. Having already reached 39.3% of the full-year goal for FY23 by September 2023, managing this deficit will be a tightrope walk. 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. But 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.

Final Thoughts

While the upcoming “vote on account” budget may limit grand gestures, it also presents an opportunity for a strategic pause. As India approaches a new election cycle, this temporary bridge can pave the way for a future budget crafted with a fresh mandate and renewed vision. In the meantime, the spotlight remains on fiscal consolidation, infrastructure push, and targeted social welfare measures.

Let us view the budget with an inquisitive lens. It represents a crucial step forward, not the final destination, on India’s journey towards fiscal and economic stability. We anticipate a pivotal moment that marks the beginning of a new era, defined by a budget that embodies the aspirations of a post-election India.

Key Takeaways

  • The budget 2024 approach to social welfare schemes remains uncertain, balancing voter appeal and fiscal responsibility in light of the upcoming elections.
  • It is expected to address critical areas such as fiscal deficit management, infrastructure development, social welfare schemes, and potential updates to taxation.
  • Budget 2024 will focus on developing roads, railways, and digital connectivity, aligning with PM Modi’s “Amrit Kaal” vision.
  • You can expect increased allocations for rural development, poverty alleviation, and healthcare.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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