Budget 2024 Date Highlights: India awaits Budget 2024 presentation by FM Nirmala Sitharaman in July

The central government’s fiscal deficit reached 3% of the annual estimates by the end of May 2024-25, marking a significant reduction compared to the same period in the previous fiscal year. This period also saw the model code of conduct in effect due to the Lok Sabha elections.

In contrast, the fiscal deficit for the first two months of the 2023-24 financial year stood at 11.8% of the Budget Estimates (BE). For the current financial year, the government has projected a fiscal deficit of 5.1% of GDP, amounting to Rs 16,85,494 crore.

Data released by the Controller General of Accounts (CGA) revealed that the fiscal deficit for April-May 2024 was Rs 50,615 crore, or 3% of BE 2024-25, a substantial decrease from the corresponding period last year.

Net tax revenue for the first two months of 2024-25 was Rs 3.19 lakh crore, or 12.3% of BE, slightly higher than the 11.9% recorded in the same period last year. Total expenditure at the end of May 2024 was Rs 6.23 lakh crore, representing 13.1% of the fiscal BE, down from 13.9% in the previous year.

These figures highlight the government’s tighter fiscal management in the early months of the 2024-25 financial year amidst the electoral period.

(PTI inputs)

India’s factory output growth, as measured by the Index of Industrial Production (IIP), fell to a three-month low of 5% in April as against 5.4% in March due to a drop in manufacturing activity, data released by the National Statistical Office (NSO) showed. Manufacturing output’s growth during April eased to 3.9% from 5.8% in March, whereas mining growth rose to 6.7% from 1.3%. Electricity output’s growth also increased to 10.2% in April from 8.6% in March.

India’s CPI inflation is expected to ease further in July and August 2024 after it fell to 4.75 per cent in May from 4.83 per cent in April. This will be driven by an early onset of the Southwest Monsoon. Economists also maintained FY2025 average inflation estimate at around 4.4 per cent.

The Southwest Monsoon has seen an early onset in Kerala (June 1) and Northeast India (June 5) by two and six days, respectively, over the normal onset date. The rain marks the commencement of its four-month sojourn which brings in 75% of the country’s annual rainfall.

India’s retail inflation, based on the Consumer Price Index (CPI), fell to a 12-month low of 4.75% in May from 4.83% in April. This was driven mainly due to the high base effect and easing food prices, data released by the National Statistical Office (NSO) showed. Food inflation during May decreased marginally to 8.69% from 8.70% in April. The drop in inflation was witnessed in spices, meat and fish, sugar, milk and products, and even vegetables, though slightly.

India’s wholesale price index (WPI)-based inflation accelerated for the third consecutive month to 2.61 percent in May, primarily driven by an increase in prices of food articles, manufacturing of food products, crude petroleum and natural gas, mineral oils, and other manufacturing, said the provisional data released by the Ministry of Commerce & Industry. In April, WPI inflation was at 1.26 per cent.

While the blog, till now, stated facts about and speculations on the probable date when the finance minister Nirmala Sitharaman is expected to present the Union Budget, let’s have a look at the state of Indian economy and various economic metrics that will affect the announcements in the Budget document. These include the inflation figures, GDP growth, fiscal deficit, among others.

President Droupadi Murmu said that 10 years ago, to save India’s banking sector from collapsing, the government brought banking reforms and made laws like IBC. “Today, these reforms have made India’s banking sector one of the strongest banking sectors in the world. Our public sector banks are robust and profitable today. Profits of public sector banks have crossed Rs 1.4 lakh crore in 2023-24 which is 35% higher than last year. The strength of our banks enables them to expand their credit base and contribute to the economic development of the nation,” she said.

“The NPAs of Public Sector banks are also continuously decreasing. Today SBI is earning record profits, LIC is stronger than ever, HAL is also giving strength to the country’s defence industry,” she added.

President Droupadi Murmu, while addressing a joint sitting of Parliament on Thursday, said that the resolve of ‘Reform, Perform and Transform’ has made India the fastest growing economy in the world. “In 10 years, India rose from the 11th position to become the 5th largest economy…Despite the COVID-19 pandemic and conflicts in different parts of the world, India has been able to achieve this growth rate. This became possible due to the reforms and decisions taken in national interest in the last 10 years. Today, India contributes to 15% of the global growth. My government is working towards making India the 3rd largest economy in the world.”

While addressing a joint sitting of Parliament on Thursday, President Droupadi Murmu said that the Union Budget will be a futuristic document and all reforms will be fast-tracked. “My Government will present its first budget in the forthcoming session. This budget will be an effective document of the Government’s far-reaching policies and futuristic vision. Along with major economic and social decisions, many historic steps will also be seen in this budget. The pace of reforms will be further accelerated in tune with the aspirations of people of India for rapid development,” she said.

Finance Minister Nirmala Sitharaman chaired a pre-budget conference at North Block in New Delhi on 25th June, 2024, attended by the Federation of Hotel and Restaurant Associations of India (FHRAI). The association proposed essential regulatory changes to support industry growth, emphasising strategic reforms to address current challenges and unlock growth opportunities aligned with sector targets.

One of the key requests put forward by the hospitality federation to the Finance Ministry was to grant Infrastructure Status for hotels across all categories and convention centres built at a project cost of Rs 10 crore and above to give fillip to the budget segment in the hotel industry. GST rationalisation was another significant concern highlighted. The Federation requested for a 12% GST rate across all hotels and also for delinking of restaurant tariffs from room tariffs.

The Lok Sabha, on June 26, elected NDA’s candidate Om Birla as the Speaker of Lok Sabha. Om Birla was fielded as the BJP-led NDA’s candidate for the Speaker for the second time, against the Opposition-led INDIA bloc’s Kodikunnil Suresh.

While elections to the Speaker’s post were common before Independence, the position of the presiding officer of the Lok Sabha has witnessed contests only thrice in Independent India – in 1952, 1967 and 1976.

India Inc, during the pre-Budget consultation with Finance Minister Nirmala Sitharaman, emphasised on several key priorities for the upcoming Union Budget. These included reducing the tax burden on the common man, sustaining capital expenditure, and implementing measures to curb food inflation. Additionally, industry leaders and associations urged the government to prioritize infrastructure development to uphold economic growth, while also underscoring the importance of supporting the MSME sector, crucial for both the Indian economy and employment generation.

While there is no official announcement on the date of the presentation of the Budget yet some of the key aspects to watch out for include:

1. Schemes: The first Budget by the Modi 3.0 Cabinet is expected to be high on the welfare agenda. Most industry experts believe that several income support schemes might be in the pipeline and facilities in line with PM Kisan Yojana may be planned to boost incomes of deprived families.

2. Capex: The gradual slowing of public capita expenditure has been a point of concern after the Interim Budget. The private corporations have been doing most of the heavy lifting. However, going forward in this new Budget for FY25, the street expects to see some significant boost to Capex.

3. Increasing Healthcare & Education Spend: The other segment that’s expected to receive a boost is the allocation for Healthcare and Education. Both these sectors have been highlighted as the key growth areas.

The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is an initiative by the central government launched to provide direct income support of Rs 6,000 annually to small and marginal farmers. The support is disbursed in three equal installments directly into the bank accounts of eligible farmers. The scheme aims to ensure financial assistance to farmers between crop cycles and promote sustainable agricultural practices across India.

From institutional landholders to people receiving monthly pensions of Rs 10,000 to professionals like lawyers, doctors, engineers and more are excluded from the PM-KISAN scheme.

Sources told CNBC TV18 that the government is likely to announce measures to boost the textile sector during the Union Budget presentation. This will be supportive for sector stocks like Bombay Dyieng, Raymond, Page Industries, Arvind, Indo Count, Gokaldas Exports, Lakshmi Machine.

Finance Minister Nirmala Sitharaman had, during the interim budget presentation earlier in February, said that the government has set a fresh record for infrastructure outlay by earmarking Rs 11.11 lakh crore, topping the existing high of Rs 10 lakh crore allocated during fiscal 2023-24. This amounted to 3.4 per cent of the GDP. With this, the country sets its eyes on goals of faster access-controlled highways, super-efficient ports, safer and speedier trains, with cleaner, and decongested cities.

Finance Minister Nirmala Sitharaman provided Rs 86,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme, retaining it at the same level as provided for in the revised estimate for 2023-24, in her interim budget speech on February 1. She pointed out that the CAG has already commented on the way MGNREGA is operating in some States, where claims are reaching a stage where they need to be verified. “Are they [those getting wages] really people existing on the ground?…and other questions critical to the very letter and spirit of the program.”

Finance Minister Nirmala Sitharaman presented the interim Budget on February 1, 2024 and made the following major announcements in the Interim Budget:

In the interim budget, the incumbent government presents the estimates of its expenditure, revenue, fiscal deficit and financial performance and projections for the upcoming financial year. The government, at the end of its tenure, presents an interim budget for 3-4 months to keep the country running.

An interim budget does not make any major policy announcements which could financially burden the next government that will present the full Union Budget.

While a budget has two parts – the report of expenses and income in the previous year and the proposed expenses and income generation in the coming year, the interim budget contains the first part, but the second part will contain documentation of basic expenses until the election.

An interim budget is presented by an incumbent government or the government that is going through a transition period or is in its last year in office before the general elections held every 5 years. It contains detailed documentation of all the expenses to be incurred and every rupee to be earned through taxes in the coming few months until the general elections. An incumbent government cannot present the full budget.

With this, the incumbent government seeks a vote of approval from Parliament to extract money from the consolidated fund of India, where the government puts all its revenue, to meet its budget expenses before the end of the financial year. The interim budget also consists of some policy measures.

According to sources, Finance Minister Nirmala Sitharaman will present the full Budget for FY25 on July 23 or 24, coinciding with the Monsoon Session of the Parliament.

On February 1, 2024, the finance minister had presented the Interim Budget, which is technically a vote on account ahead of the elections to take care of government expenses in the interim till a new Government is voted to power. This happens every 5 years or when the existing government is dissolved and elections are held.

During her address after the GST Council Meet, Finance Minister Nirmala Sitharaman emphasized the Centre’s commitment to bolstering states’ economies through prompt tax devolution and the settlement of GST compensation arrears to drive growth. She highlighted the ‘Scheme for Special Assistance to States for Capital Investment’, maintaining that while most loans are unrestricted, a portion remains conditional on states implementing citizen-centric reforms and specific capital projects across

According to the data released by the Ministry of Finance, the Central Goods and Services Tax (CGST) collection came in at Rs 32,409 crore. The State Goods and Services Tax (SGST) stood at Rs 40,265 crore. Meanwhile, Integrated Goods and Services Tax (IGST) was at Rs 87,781 crore, including Rs 39,879 crore collected on imported goods.

The Monsoon Session of Parliament is scheduled to commence on July 22, according to sources. It is expected to run until August 9. During this session, the government is anticipated to present the Union Budget for 2024-25.

On June 20, Finance Minister Nirmala Sitharaman held the second pre-Budget consultation meeting with top experts from the financial and capital markets sector. Following the meeting, Nilesh Shah, Managing Director of Kotak Mahindra AMC, remarked, “I shared with the Honourable Finance Minister that, under the guidance of our regulator SEBI, mutual funds have successfully spread financial awareness. We have enlisted over 4 crore Indians to participate in the journey of Viksit Bharat and secure their financial freedom.”

On June 24, Finance Minister Nirmala Sitharaman chaired the sixth pre-budget consultation in New Delhi. She met with representatives of trade unions and labour organisations to gather suggestions for the upcoming General Budget 2024-25.

On June 22, Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, chaired a pre-budget consultation with finance ministers from various states and union territories. The meeting aimed to gather insights and recommendations for the upcoming Union Budget 2024-25.

According to the data released by the Ministry of Finance, the Central Goods and Services Tax (CGST) collection came in at Rs 32,409 crore. The State Goods and Services Tax (SGST) stood at Rs 40,265 crore. Meanwhile, Integrated Goods and Services Tax (IGST) was at Rs 87,781 crore, including Rs 39,879 crore collected on imported goods.

According to the data released by the Ministry of Finance, Goods & Services Tax (GST) collections during the month of May 2024 stood at Rs 1.73 lakh crore. This is 10 per cent higher than the same period last year. For April, GST collection had breached the Rs 2 lakh crore milestone. The gross GST collection during April was recorded at Rs 2.10 lakh crore, up 12.4 per cent on-year.

Finance Minister Nirmala Sitharaman announced that the GST Council has recommended setting monetary thresholds for filing appeals by the department in various courts. “To reduce government litigation, the council has recommended a monetary limit of Rs 20 lakh for the GST Appellate Tribunal, Rs 1 crore for High Court, and Rs 2 crore for the Supreme Court for filing appeals by the department,” she said.