In just over a week, on February 1, Union Finance Minister Nirmala Sitharaman will present the final budget for the fiscal year 2024-25, marking the culmination of the second five-year term of the Narendra Modi government. This budget, however, will be an 'interim' one due to the upcoming general elections scheduled for April-May. The full budget will be unveiled later in the year by the incoming government.
What is the Union Budget?
- The union budget is the central government's annual financial statement.
- It outlines the government's proposed expenditures and revenues for the upcoming fiscal year.
- The union finance minister presents it in Parliament.
- It covers the period from April 1 to March 31 of the following year.
- Serves as a comprehensive document outlining the government's economic and fiscal policies for the next fiscal year.
- Includes details about proposed expenditures, revenues, liabilities, and welfare schemes.
- It is a crucial tool for financial planning and policy-making.
Key Updates and Expectations:
Establishment of Ministry of Investment Proposed by CII:
The Confederation of Indian Industry (CII) has recommended the establishment of a comprehensive Ministry of Investment to reshape the country's economic landscape.
Boost for Farm Sector:
The government is expected to enhance allocation for key farm sector schemes and increase credit in the interim Budget to stimulate rural economy growth.
Focus on Education Sector:
India Inc. anticipates significant announcements, including tax cuts, incentives, and fiscal stimulus to drive economic growth, particularly in the education sector.
Apparel Sector Demands:
The Apparel Export Promotion Council (AEPC) seeks uniformity in Goods and Services Tax (GST) across the man-made fibres (MMF) value chain, aiming for a uniform GST of 5% to enhance industry competitiveness.
Market Rally for Railway Stocks:
Railway stocks surged by 7% on the stock market in anticipation of fresh investments expected to be announced in the Budget 2024.
Expectations from Tourism Industry:
The tourism industry expects income tax reductions, standardization of tax collected at source (TCS), and infrastructure focus to boost the sector's growth.
Key Areas to Watch Out for:
The government may focus on enhancing the National Pension System (NPS), extending tax concessions, increasing agricultural credit targets, expanding the Production-Linked Incentive (PLI) scheme, and implementing income tax on affluent farmers.
Some analysts predict that the interim budget will not have a significant impact on the market overall.
'Interim' Budget Explanation:
Due to Election Commission of India (ECI) limitations, the budget is classified as 'interim,' barring announcements that could influence voter decisions. The full budget will be presented by the incoming government post-election.
Traditional 'Halwa' Ceremony:
While the date for this year's pre-budget ceremony is yet to be announced, it traditionally takes place to mark the beginning of budget preparation.
Budget Date Change:
Former Finance Minister Arun Jaitley changed the budget presentation date to February 1 in 2017, deviating from colonial practices to allow more time for policy implementation.
Insights from Last Year's Budget:
FM Sitharaman emphasized building on previous budgets to achieve a prosperous and inclusive India.
Streamlining Tax Processes:
Experts suggest streamlining the Income Tax Return (ITR) process and revisiting House Rent Allowance (HRA) policies to simplify tax compliance and benefit taxpayers.
Tourism Sector Growth Prospects:
The tourism sector expects policy measures to facilitate growth, generate employment, and enhance infrastructure.
Stay tuned for more updates and comprehensive coverage of Budget 2024.