Budget 2024 Speech highlights: Nirmala Sitharaman abolishes Angel Tax, STT on F&O hiked

Taxpayers are eagerly anticipating an increase in basic tax exemption limits under both the old and new tax regimes in the upcoming budget. Currently, the old tax regime provides an exemption on earnings up to Rs 2.5 lakh, and Rs 3 lakh for senior citizens. The new tax regime, on the other hand, offers a basic exemption limit of Rs 3 lakh for all taxpayers.

While the old tax regime allows for various deductions and exemptions that significantly reduce taxable income, it offers a range of tax slab rates. The new tax regime introduced in Budget 2023 includes a Rs 50,000 standard deduction and provides for a ‘Nil’ income tax liability for individuals earning up to Rs 7.5 lakh annually, thanks to the rebate under Section 87A of the Income Tax Act.

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In a quarterly bulletin released before the Union Budget 2024, the Indian Council for Research on International Economic Relations (ICRIER) has emphasized the urgent need to nearly double the current budget for agricultural research and development (ARDE). The bulletin suggests increasing the budget for the Department of Agricultural Research and Education (DARE) from the current Rs 9,941 crore to approximately double this amount over the next 2-3 years.

The report highlights that past studies have shown a high return on investment in agricultural research, with every rupee invested yielding a return of 11.2. This is significantly higher compared to returns on investments in fertilizer subsidies (0.88), power subsidies (0.79), education (0.97), or roads (1.10). According to the bulletin, reallocating funds from fertilizer and power subsidies to agricultural R&D could greatly improve food and nutritional security, especially in the face of climate change challenges. The bulletin, edited by agricultural economist Ashok Gulati, underscores the potential benefits of such a shift in funding priorities.

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A recent prediction report by Jarvis, an AI-driven Market Intelligence and Equity Market Analytics Platform, reveals that the government is expected to allocate between Rs 2 lakh crore and Rs 2.25 lakh crore for Indian Railways in the upcoming Railway Budget. This substantial funding is aimed at improving infrastructure, enhancing connectivity, and modernizing services across the railway network to address long-standing issues and meet increasing passenger and freight demands.

The report also highlights potential challenges that could impact these ambitious plans. Funding constraints are identified as a major obstacle, necessitating innovative financing solutions and greater private sector involvement. Additionally, effective project execution will be crucial, requiring improved management practices and close monitoring of progress.

As the Union Budget approaches, the FMCG industry is hopeful for measures that will enhance the rural economy and stimulate consumption. The sector has faced challenges with rising input costs and inflation, leading to reduced consumer spending among rural and middle-class consumers. Despite a recent increase in sales volume in late June, there are concerns about whether this growth is sustainable or a temporary spike.

With Finance Minister Nirmala Sitharaman scheduled to present the Union Budget 2024 on July 23, the FMCG industry is advocating for income tax relief for salaried individuals to boost consumption. Additionally, they are seeking reforms to address the inverted tax structure within the GST framework, increased grants for the FMCG sector, and other policies designed to drive sector growth.

Saugata Gupta, MD & CEO of Marico Limited, anticipates that the upcoming Union Budget will focus on fostering inclusive and sustainable development. Expectations include continued investment in rural infrastructure and employment, as well as support for agricultural activities to boost rural incomes. Gupta highlights that tax relief for the middle-class and salaried individuals would increase purchasing power and stimulate consumption. Additionally, he emphasizes the importance of government support during the critical monsoon period to stabilize rural economies and ensure farmers have access to necessary resources.

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Industry experts are advocating for an increase in foreign direct investment (FDI) to enhance capital flows into the banking sector. Vivek Iyer, Partner at Grant Thornton Bharat, noted that as India is a banking-driven economy, measures such as liberalizing foreign direct investment and rationalizing foreign bank tax rates could significantly boost capital inflows. These steps are seen as crucial for achieving the government’s “Amrit Kaal” goals for the country. Currently, 49 percent of FDI in the banking sector is permitted under the automatic route, with government approval needed for investments beyond this limit in private banks, while public sector banks allow up to 20 percent FDI.

As the Union Budget presentation approaches, the banking sector is counting on continued policy support for infrastructure spending. Industry leaders and experts are advocating for the Budget to introduce policy changes and incentives that promote growth, ensure financial stability, and support digitalization. Yashraj Erande, India Leader for Financial Services at BCG, underscores that for India to reach a $7 trillion economy, the financial services and fintech sectors must play a critical role. He anticipates that the upcoming budget will accelerate reforms, focusing on expanding large-scale balance sheets, integrating digital and AI technologies to enhance efficiency, and emphasizing strong governance and risk management. Improving fintech partnerships and unlocking additional domestic and global capital for these balance sheets and technological advancements will also be essential.

Ahead of the Union Budget, Prime Minister Narendra Modi emphasized that India remains one of the fastest-growing economies, maintaining an impressive growth rate of 8 percent over the past three years. He highlighted that the upcoming Budget will serve as a crucial cornerstone for the government’s vision of ‘Viksit Bharat,’ or a developed India.

Modi expressed pride in the government’s achievement of being elected for a third consecutive term and presenting its first Budget for the third time. He described the Budget as a key component of the ‘Amrit Kaal’ phase, which will shape the direction of the next five-year term. The Budget is expected to play a significant role in establishing the foundation for a developed India.

The Prime Minister also underscored the positive economic outlook and peak opportunities, marking this as an important milestone in India’s development journey

Stakeholders in the real estate sector, including homebuyers in the affordable housing segment, are anticipating significant reform measures in the upcoming Union Budget, the first of the Modi 3.0 regime, to be presented on July 23. The affordable housing sector has greatly benefited from the Pradhan Mantri Awas Yojana during the Modi 2.0 term. There is now a growing expectation that Finance Minister Nirmala Sitharaman will not only reintroduce but also expand tax benefits under Section 80EEA.

Ahead of the Union Budget 2024, tax experts are calling for a more flexible tax system, recommending that the government allow taxpayers to switch between tax regimes. They argue that this flexibility would enable better investment planning and create a more taxpayer-friendly system. Allowing such options would enhance fairness and efficiency within the tax framework.

Previously, when the new tax regime was introduced, taxpayers could switch between regimes without restriction, regardless of their status. Both salaried and non-salaried individuals were permitted to change their tax regime annually.

Currently, only individual and HUF taxpayers have the flexibility to choose between the old and new tax regimes on a yearly basis. In contrast, those earning income from business or profession who opt out of the new tax regime under Section 115 BAC can return to it only once.

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As Finance Minister Nirmala Sitharaman prepares to present her seventh Union Budget on July 23, expectations are high among government employees for the announcement of the 8th Pay Commission. Over 49 lakh central government employees and 67 lakh pensioners are eagerly anticipating this move from the Modi government.

Recently, various bodies and unions representing central government employees have submitted proposals to the Centre. These proposals include establishing the 8th Pay Commission, restoring the old pension scheme, and addressing 18 months’ worth of dearness allowance arrears.

Reports suggest that FM Sitharaman may include a major announcement about the 8th Pay Commission in her upcoming budget speech. Historically, a new pay commission has been set up every ten years. If the Modi government adheres to this tradition and introduces the 8th Pay Commission in 2025-26, it could lead to a salary increase of up to 44.44%.

The Economic Survey 2023-24, released on Monday (July 22), highlighted that India’s aviation sector is on the brink of unprecedented growth. The survey emphasizes the need to enhance airline efficiency and sustainability while expanding airport capacity to fuel economic progress. It also underscores the significance of collaboration among the government, industry stakeholders, and international partners to bolster Indian airlines and improve long-haul connectivity.

In the services sector, the survey noted that the aviation industry experienced the highest credit influx, with a year-on-year growth of 56 percent. This surge is attributed to increased activities in aircraft leasing, recruitment, and a favorable medium to long-term growth outlook.

Finance Minister Nirmala Sitharaman will deliver the Budget Speech at 11 am in the Parliament. The current session of the Parliament has been called the Budget Session. Stay tuned to Financial Express.com for all the live updates from the speech. You can access the Budget Speech after she delivers on indiabudget.gov.in

The Economic Survey highlighted that India should be open to FDI from China as it can help the country achieve its goal of getting a higher share of the global value chain a lot faster. According to the Survey, it would be more effective to have “Chinese companies invest in India.”

(Hon) Brig. Dr. Arvind Lal, Executive Chairman, Dr Lal Pathlabs spoke to Financial Express.com on the Economic Survey. According to him, “The government Health expenditure has remained stagnant at 1.9% for a few years, in fact this includes spending on water and sanitation, while we feel that they should not be included. Though water and sanitation are important wider factors affecting health, they should be considered separately in the social sector spending.”

He added that, “the government itself has committed to increase public health spend by 2.5% by 2025. The government needs to ensure that they do not miss the target”. While we appreciate the importance accorded to Mental Health, the focus on NCDs (non communicable diseases) needs to be enhanced, as they account for nearly 65% of deaths in the country.”

All eyes are on Finance Minister Nirmala Sitharaman’s Budget speech for potential reference to retail participation in the F&O space. This particularly gains importance after the Economic Survey raised concerns about possible consequences of increased retail participation. The Economic Survey also highlighted that “capital markets are gaining importance and playing a key role in the overall India growth story.”

The economic survey highlighted that the Rs 111 trillion National Infrastructure Pipeline (NIP) has over 9,666 projects and schemes underway at the moment. These projects are from 37 segments under infrastructure and are in different stages of implementation and completion. The National Infrastructure Pipeline (NIP) is outlined for implementation for a 5-year period between 2020-2025.

According to Chief Economic Advisor V. Anantha Nageswaran , private sector investment has shown signs of picking up in the past three years but one needs to ensure adequate investment in the private sector and the private sector needs to take steps to bring about adequate job creation.

Hike in standard deduction is the most talked about topic ahead of FM Nirmala Sitharaman’s speech. Taxpayers are waiting for potential relief and exemptions that the FM might offer. Most economists believe that measures like cut in standard deduction, tweaking the tax slabs and increasing the HRA exemptions will help put more money in the common man’s hand. That in return is set to drive consumption and boost the economy.

According to the Economic Survey 2024, NEP2020 is designed to empower youth to tackle the challenges of knowledge-driven economy. According to the survey, schools in India-both private and public cater to 26 crore students and the NEP 2020 with help with access to better quality education and enable India in its aspirations as a global knowledge superpower.

FM Nirmala Sitharaman’s Budget speech is the most awaited event in the next 24 hours. As Economic growth is pegged at 6.5-7% for FY25, the Budget is expected to include allocations to push capex and infra growth and boost the economy.

The Economic Survey 2023-24 was presented in Parliament on Monday by Finance Minister Nirmala Sitharaman. Chief Economic Advisor V Anantha Nageswaran and his team authored the report. Here are the some key highlights from the Economic Survey 2024:

The Modi government’s unprecedented third popular mandate indicates ongoing political and policy stability.

India‘s GDP growth is projected to be 6.5-7% in FY25, compared to 8.2% in 2023-24.

Domestic factors drove economic growth in FY24, despite a challenging global economic environment.

The unemployment rate decreased to 3.2% in 2022-23.

As of July 8, 2024, over 34.7 crore Ayushman Bharat cards have been issued, facilitating 7.37 crore hospital admissions.

The final countdown has begun for the Budget 2024. Hello and Welcome to the Live Budget 2024 blog that will bring you update on the latest expectation ahead of the Budget. As Finance Minister Nirmala Sitharaman tables the Budget at 11 am on July 23, Financial Express.com brings the latest announcements and in-depth analysis on what they mean and how it will impact your Budget and business.