The NDA government led by Prime Minister Narendra Modi has appointed Nirmala Sitharaman as the Finance Minister. She is also perhaps one of the few women in the Cabinet for the third term under Prime Minister Modi. Presentation of the full Budget for 2024-25 is perhaps the most important event to watch out for the .
Meanwhile, the Parliament will hold a special session, which will start on June 18, which will take a decision on the date for presentation of the Union Budget and also some schemes.
While the Ministry of Finance has already started working on the Budget, it is expected to begin industry consultations. It would be interesting to watch if the government will decide on sticking to the fiscal deficit target of 5.1 per cent of GDP, as announced in the Interim Budget presented in February, or if it will go for aggressive fiscal consolidation, given the recent announcement by RBI wherein the central bank had accorded a dividend of Rs 2.1 trillion to the central government.
The Finance Ministry is also expected to resolve the controversy after it amended the Income Tax Act in the FY24 Budget, mandating that if a large company does not pay a micro, small, or medium enterprise within 45 days in the case of written agreements, starting April 1, 2024, it cannot deduct the expense from its taxable income, leading to potentially higher taxes. Last month, Nirmala Sitharaman had hinted at reconsidering this.
The finance ministry also has issues to look into including, the long-pending strategic sale of IDBI Bank, Shipping Corporation, and NMDC; GST issues, among other matters.
Narendra Modi-led NDA government took oath on 9th June.