When Finance Minister Nirmala Sitharaman rises to present the 2024 Union Budget at 11 am on July 23, she may perhaps be mindful of the record she will set: presenting seven consecutive budgets.
Bengaluru: When Finance Minister Nirmala Sitharaman rises to present the 2024 Union Budget at 11 am on 23rd July, she may perhaps be mindful of the record she will set: presenting seven consecutive budgets.
That, however, will be a secondary consideration. As the Narendra Modi government finds itself with a greater fiscal breathing space than previously expected, the first budget of its third term is a much anticipated one among industry, markets and citizens.
Expectations are that thanks partly to the bumper Rs 2.11-lakh crore dividend paid by the Reserve Bank of India to the government, Sitharaman may be able to provide tax relief to the salaried classes, bring down the cost of housing loans, announce a cash transfer scheme for poor urban women, increase the allocation for infrastructure spending and welfare schemes and expand the production-linked incentive (PLI) scheme to cover more sectors.
However, beyond PLI and big-ticket infrastructure projects, details are scarce as to how the Finance Minister will tackle the biggest challenge facing the Indian economy: job creation.
“The government should focus on adherence to fiscal prudence and continue on the fiscal consolidation path, but at the same time refrain from obsessing too much over the fiscal stance as it may come in the way of long-term sustainable growth path,” said Soumya Kanti Ghosh, group Chief Economic Advisor, State Bank of India, and member of the Sixteenth Finance Commission.
“We think the budget will balance economic imperatives with political ones. In terms of the deficit, this would mean the government using the windfall from the RBI dividend and higher tax revenues to fund higher spending, rather than reducing the deficit from the interim budget estimate, which already suggested accelerated consolidation,” said Shreya Sodhani, Regional Economist, Barclays.
