Ahead of the presentation of the Budget on July 23, Prime Minister Narendra Modi held a meeting with eminent economists on Thursday. Union Finance Minister and BJP leader Nirmala Sitharaman will present the Union Budget for FY25 on July 23. Following the recent Lok Sabha elections where the BJP did not secure an absolute majority under Narendra Modi’s leadership, the roles of key allies like the Chandrababu Naidu-led TDP and Nitish Kumar-led JDU will be crucial. Experts have also urged the government to provide tax relief to boost consumer spending, alongside measures to combat inflation and accelerate economic growth.
Budget 2024 Expectation Highlights: Nirmala Sithraman set to present on July 23.
As the government has pledged to bring the fiscal deficit down to 4.6 per cent by FY26, Aurodeep Nandi, the India economist at Nomura, told that another important topic to watch is the fiscal glide path. Nandi further emphasised that gaining an understanding of the incoming government’s economic agenda will be a crucial area to monitor, citing the 100-day plans of the government that were created by several ministries prior to the elections.
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According to the National Skill Development Corporation (NSDC), only 10% of Indian workers receive formal training compared to 60-90% in wealthy nations. Closing this gap should be a primary concern. The government should also offer tax breaks and subsidies to MSMEs investing in staff training and development to promote ongoing learning and adaptability.
Mukul Goyal, Co-Founder of Stratefix Consulting said, "We anticipate that the Union Budget 2024 will introduce significant initiatives to assist workforce development and job creation for MSMEs in India. One crucial area is improved skill development. The budget should allocate significant funding for upskilling and reskilling programs, particularly in automation, artificial intelligence, and data analytics. Providing future-ready skills will enhance employability and foster creativity in MSME workforces."
The Reserve Bank of India has estimated a credit gap of ₹20 to ₹25 trillion in the MSME sector, highlighting the need for better financing accessibility.
India's fiscal framework underwent a significant shift in 2016 when the Railway Budget was merged into the Union Budget. The Railway Budget was introduced as a separate document from the normal budgeting proceedings decades ago, representing the unique difficulties and vital function that the Indian Railways faced.
For the Union Budget 2024, Global Energy Alliance for People and Planet (GEAPP) anticipate a significant boost to the clean energy sector, building on the government's efforts over the past decade.
"There is a need for substantial increase in allocations towards scaling-up decentralised renewables and battery storage. Recognising that an effective energy transition requires seamless inter-ministerial coordination, it is essential that the government implements robust institutional arrangements to expedite this transition at the state level, possibly through a dedicated commission," Saurabh Kumar, Vice President- India, Global Energy Alliance for People and Planet (GEAPP), said.
The new government's economic vision and management of the political theme will be among the key aspects to watch in the upcoming Union budget, a Japanese brokerage said on Thursday.
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Godrej & Boyce Executive Director & CEO, Anil G Verma said on Thursday that the government needs to take steps such as reviewing personal income tax slabs in the upcoming Union Budget to drive private consumption, which in turn will drive private investment.
"The important area that needs to be addressed now, amongst others, is the continued lower-than-expected growth in private consumption. I am hopeful that the GoI will take steps that boost consumption through a slew of measures that could include optimising GST rates, reviewing of personal income tax slabs and reassessment of the interest rates to provide EMI relief to the large masses whose purchases of assets such as homes and consumer durables are through loans. I hope that the upcoming budget continues to prioritise these areas while also introducing policies that promote innovation, production-linked incentives (PLIs), and sustainable practices. These measures are crucial for driving holistic economic growth and ensuring balanced and inclusive development for India," Verma said.
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According to Jyoti Bharadwaj, Founder of TeaFit, on the ongoing GST framework, companies committed to crafting wholesome beverages confront substantial challenges. The disparity in tax rates, where fruit-based drinks attract 12 per cent GST despite potential misuse of this classification by sugary or concentrated variants, while carbonated drinks face a hefty 40 per cent tax (28 per cent GST and 12 per cent Cess) irrespective of their health profile, strains margins.
"Unlike progressive tax systems in nations such as Singapore and the UK, which levy taxes based on sugar content to foster healthier food choices, our rigid tax structure impedes the introduction of healthier carbonated alternatives by imposing uniform taxes. A reform that prioritises nutritional value over broad categorisations within the GST system is imperative. Such a reform would empower companies to advance their mission of promoting public health through innovative, low-sugar beverages. By aligning tax incentives with consumer preferences and global health trends, this approach not only supports industry innovation but also facilitates a market shift towards genuinely health-conscious products," Bharadwaj added.
One notable demand gaining traction is the exemption of GST on all educational expenses. This includes various educational services such as test preparation courses and job-oriented skill programs. The initiative is particularly aimed at benefiting students from Below Poverty Line (BPL) and Low Income Group (LIG) families, aiming to enhance accessibility and affordability of education. Industry stakeholders emphasize the importance of this exemption to ensure broader access to educational opportunities, aligning with efforts to support economic inclusivity and educational empowerment. Read more to know what industry experts are saying.
Ujjwal Singh, Founding CEO of Infinity Learn by Sri Chaitanya, stressed on the renewed opportunity presented by the government's re-election to advance India's education culture and infrastructure. He also called for collaborative efforts between the government and stakeholders to address existing educational challenges, particularly focusing on bridging the digital divide by strengthening technological infrastructure in schools nationwide. Singh underscored the importance of prioritizing inclusive and advanced educational systems to empower all learners.
He further advocated for policies that enhance equitable access to quality education, proposing lower GST rates of 5% on online learning to make education more affordable and accessible in tier 2 and 3 cities. This initiative, he believes, will alleviate financial pressures on parents and help dismantle geographical and socioeconomic barriers to education.
Finance Minister Nirmala Sitharaman intends to address tax relief in the forthcoming full Budget to boost private consumption and economic growth. There are high expectations as she aims to meet the needs of various income groups and key constituencies. Talking to ET Now, Sitharaman said that she will listen to all demands.
Amit Kapoor, Co-Founder of Eupheus Learning, expressed expectations for the upcoming Union Budget under the Modi 3.0 government. He emphasised the need for increased support for digital infrastructure in schools and enhanced funding for innovative educational technologies. Kapoor also advocated for GST applicability on both print and digital solutions to streamline efficiencies in the educational ecosystem, aiming to make education more accessible, affordable, and effective for students nationwide.
He underscored the importance of new education policies that bridge the gap between classroom and remote learning, ensuring every child has access to quality resources. Kapoor highlighted the use of STEM/STEAM kits and reading programs as tools to enrich learning experiences. Additionally, he proposed promoting activities such as storytelling, Olympiads, and coding competitions to foster creativity and critical thinking, preparing future generations to meet evolving challenges.
Governor Shaktikanta Das in an interview with CNBC-TV18 said that India's retail inflation for June is anticipated to be around 5%, aligning with forecasts gathered by the Reserve Bank of India.
He mentioned that the RBI is expected to finalize the neutral rate after completing ongoing analysis in the next 1-2 months. The retail inflation figures for June are set to be released on Friday.
Besides Sitharaman, Planning Minister Rao Inderjit Singh, Chief Economic Advisor V Anantha Nageswaran, economists Surjit Bhalla and Ashok Gulati, and veteran banker K V Kamath were among those present at the session. Niti Aayog Vice Chairman Suman Bery and other members of the planning body also participated in the discussions.
Prime Minister Narendra Modi on Thursday convened a meeting with economists and sectoral experts. Finance Minister Nirmala Sitharaman also participated in this crucial session, which marks a pivotal step as the government prepares to present its comprehensive budget for its third term on July 23. The meeting featured extensive discussions aimed at shaping the economic trajectory of the country for the upcoming fiscal year. This budget assumes particular significance as it will be the primary economic blueprint under the Modi 3.0 administration, outlining a strategic roadmap for India's development with the ambitious goal of achieving developed nation status by 2047.
Ahead of the Union Budget 2024-25, industry leaders opine that certain medicines may get more expensive after Niramala Sitharaman's announcement. Dr. Sujit Paul, Group CEO, Zota Healthcare Ltd. told Financial Express.com a number of variables impacting the pharmaceutical sector will eventually cause the price of prescription medications to rise. There is a possibility of an increase in the cost of drugs that significantly rely on imported Active Pharmaceutical Ingredients (APIs). Read more.
The Indian government dedicates a substantial portion of its yearly budget to defence, with the fiscal year 2023-24 seeing an allocation of around Rs 5.94 lakh crore, a notable rise compared to earlier years. However, the breakdown of these allocations often lacks sufficient detail for public scrutiny. While major categories such as capital outlay, pensions, and salaries are disclosed, specific information on procurement, research and development, and operational expenditures remains less transparent. Read more.
Rohan Bhargava, Co-founder of CashKaro & EarnKaro says, "From an entrepreneurial perspective, the upcoming end of the Startup India Seed Fund scheme in 2025 highlights the need for a new initiative to continue supporting the growth of the startup sector. Startups are also calling for the complete removal of angel tax regulations to foster a more conducive investment environment. Furthermore, AI-related regulations should be addressed at the earliest to ensure that as a country, we don't hit bottlenecks in innovation and growth. Startups prefer self-regulation over stringent guidelines, which can stifle creativity and rapid development in this crucial sector."
He added, "Pro-MSME policies are also vital. Simplifying the regulatory framework, providing tax benefits, and creating infrastructure for logistics and digital payments are necessary steps. Overall, keeping operational costs low for MSMEs through such measures will support their sustainability and growth."
Rohan Bhargava, Co-founder of CashKaro & EarnKaro, focused on income tax reforms. He highlighted the current steep 30% tax rate on earnings above Rs 15 lakh and advocated for a more gradual increase, suggesting raising the income threshold from Rs 3 lakh to Rs 5 lakh to boost disposable income, especially benefiting lower earners. Bhargava believes this change would stimulate consumption, bolster middle-class savings, and provide a positive impetus to the e-commerce sector.
The live telecast of Union Budget 2024, scheduled for presentation at 11 am in the Lok Sabha by Finance Minister Sitharaman, will be available on various platforms. Viewers can watch it live on government channels including Doordarshan, Parliament's channels, and Sansad TV. Additionally, the Government of India's YouTube channels will broadcast the event.
For online viewers and those interested in accessing budget documents, the official portal http://www.indiabudget.gov.in will host the livestreaming of the budget speech along with key documents. This platform offers a convenient way to follow the budget proceedings in real-time and access comprehensive information related to Budget 2024.
As per tradition, the Union Budget for 2024 will be presented in Parliament at 11:00 am on July 23, adhering to the customary schedule. On February 27, 1999, Yashwant Sinha introduced a significant change by presenting the Union Budget at 11 am for the first time. This departure from the traditional 5 PM, a colonial-era timing.
The Budget Session of Parliament is set to begin on July 22 and will conclude on August 12, according to an official notification. Finance Minister Nirmala Sitharaman will present the Union Budget FY25.
In 2017, the Indian government integrated the Railway Budget with the Union Budget, ending a 92-year-old practice of presenting them separately. This decision was influenced by recommendations from a committee chaired by Bibek Debroy of NITI Aayog and supported by a white paper authored by Debroy and Kishore Desai. The integration aimed to streamline budgetary processes, improve resource allocation, and enhance financial governance. Read more.
During the interim Budget 2024 presentation on February 1, Union Finance Minister Nirmala Sitharaman introduced the concept of 'Viksit Bharat by 2047,' envisioning a developed India. She emphasised that a detailed roadmap for achieving this vision will be unveiled in the full budget scheduled for July 23. Here's an explainer.
Andhra Pradesh Chief Minister N Chandrababu Naidu has requested a handout of Rs 1 lakh crore ($12 billion) to be included in the Union Budget 2024. It further said that PM Modi has given an 'in principle' approval for financial aid to Andhra Pradesh. Similarly, Nitish Kumar has also sought special assistance of Rs 30,000 crore for Bihar. Read more.
Up to 40% of the budget allocation earmarked for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has been utilized already. This utilisation suggests a potential need for the government to augment the outlay beyond the initially estimated Rs 86,000 crore in the interim Budget. Despite this expenditure, the government may opt to maintain the MGNREGS allocation at its current level in the upcoming full Budget presentation. Read more.
Rajat Agrawal, CEO of Barista Coffee, emphasises the critical need for government support to revive consumer confidence in the Indian retail sector. He has asked for:
-Tax Cuts: Planned Reduction in individual income tax rates, especially for middle-income earners, could boost disposable incomes and drive spending.
Infrastructure Investment: Increased spending on infrastructure (roads, highways, rural development) would create jobs and improve connectivity, potentially leading to higher disposable incomes and increased demand for consumer goods.
-GST Rationalization: Simplifying the Goods and Service Tax (GST) structure would ease compliance burdens for retailers, allowing them to focus on their core business and make the playing filed fare for all. As of now the F&B business is not eligible for input credit on both Opex & Capex, which is the biggest impact on the earnings and cash flows of the business. Rationalizing the same will ease the business to large extent.
From the halwa ceremony to briefcase tradition, the Budget has several interesting features. Until 2016, the Railway Budget was separate but was integrated into the Union Budget. The Budget's "halwa ceremony" marks officials being sequestered for secrecy. The Budget documents are printed at the North Block press. Read more.
The Union Budget is presented annually by the Union Finance Minister typically in February. It covers the government's financial plans for the upcoming fiscal year (April 1 to March 31). The Union Budget requires approval from both houses of Parliament before it becomes effective. It is the primary budget document that sets the financial roadmap for the entire fiscal year.
The Interim Budget is presented in election years or when the government's term is coming to an end and a new government might be elected. It serves as a temporary budgetary measure until a full-fledged Union Budget can be presented by the new government. This Budget typically focuses on essential expenditures like salaries, ongoing programs, and other necessary expenses until the new government can formulate a detailed budget.
The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) is eagerly anticipating the upcoming budget, focusing on key expectations for the sugar and bioenergy sector. According to Deepak Ballani, Director General of ISMA, the industry's priorities include:
-GST Reduction for Cleaner Mobility: Advocating for a reduction in GST to 5% on Hybrid Electric Vehicles (HEVs), Flex-Fuel Vehicles (FFVs), and ethanol producing machinery. This move aims to promote environmentally friendly transportation solutions and curb greenhouse gas emissions.
-Lower GST on E-100 Ethanol: Proposing a decrease in GST from 18% to 5% on E-100 ethanol to encourage wider adoption. ISMA emphasizes the importance of competitive pricing for ethanol compared to gasoline to enhance its attractiveness in the market.
-Stabilizing Sugarcane Production: Highlighting the need to stabilize sugarcane production to meet targets under the Ethanol Blending Program (EBP). ISMA suggests leveraging existing government schemes and allocating Rs. 37,996 crore for 2024-29 to enhance sugarcane yield and expand cultivation areas.
Abhishek Gupta, CEO, Rau’s IAS Study Circle, said that the Union Budget 2024-25 should lay down a Blueprint for Viksit Bharat - Developed, Inclusive, Resilient and Self-Sufficient India by 2047.
Here are the Budget Expectations:
1. Fall in Household financial Savings to its lowest level in 5 years has led to the Savings-Investment Gap. Higher Tax Benefits for Small Savings Schemes likely.
2. Private sector Investment, which has fallen to its lowest level in the last 4 years, needs to be encouraged by deepening the Bond Market, higher allocation to NaBFID etc.
3. Constraints in Infrastructure such as Failure of PPP, poor progress in Transshipment ports, Railway Safety etc. needs to be addressed.
4. Increasing Farmers’ Income levels through Crop Diversification; Agricultural marketing reforms; Push to FPOs etc.
5. Labour Intensive Industries such as Textile and leather must receive focus for Job Creation.
6. Sabka Saath and Sabka Vikas with focus on 4 major castes- Poor, Women, Youth and Farmer would continue. However, focus must be laid down on addressing growing income Inequalities.