• By Vivek Raj
  • Tue, 23 Jul 2024 08:33 AM (IST)
  • Source:JND

Budget 2024: The central government is all set to present its first full budget today after the NDA secured a majority in the recently held Lok Sabha elections, with Prime Minister Narendra Modi assuming power for the third time. The Union budget will be presented by Finance Minister Nirmala Sitharaman around 11 am, marking her seventh consecutive budget and with that, she will become the first FM to do so, surpassing the record of former Prime Minister Morarji Desai.

The pre-budget economic survey has estimated a growth rate of 6.5-7 per cent for the financial year 2025. Experts anticipate announcements aimed at economic prosperity for the general public. The government is expected to promote local procurement across various sectors to boost job creation and provide tax incentives for new manufacturing facilities.

Given the recent Lok Sabha election results where the BJP did not secure a majority and returned to power with the support of allies, there is speculation that the Modi government may prioritise job creation. The opposition has been vocal about the issues of unemployment and inflation, increasing pressure on the government to address these concerns in the budget.

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Middle-Class Tax Relief

One of the most anticipated aspects of the budget is potential tax relief for the middle class. Expectations are high as the pre-election interim budget did not address their concerns.

Budget Expectations: Income Tax

Finance Minister Nirmala Sitharaman is anticipated to announce significant changes to the income tax structure in the upcoming budget. The government is likely to introduce a 'Single Hybrid Tax Regime.' Under this new system, the exemption slab for new taxpayers could be increased from the current Rs 3 lakh to at least Rs 4 lakh.

Established taxpayers with incomes exceeding Rs 15 lakh have traditionally preferred the old tax regime. To encourage a shift to the new regime, the government may introduce incentives, including a new tax slab for incomes between Rs 15 lakh and Rs 18 lakh.

The fiscal deficit is projected at 4.5 percent, an improvement from the previous year's 5.8 percent. The government's planned capital expenditure stands at Rs 11.1 lakh crore, up from Rs 9.5 lakh crore the previous year. This reflects a continued focus on infrastructure development, with the government encouraging states to increase their capital expenditure as well.

Support for MSMEs

Sitharaman is expected to announce measures to boost micro, small, and medium enterprises (MSMEs). These sectors have significant growth potential, particularly in defense, electronics, and electric vehicle manufacturing.

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The Union Budget 2024 is likely to be passed on July 30. Opposition leaders have planned to corner the government on issues like price rise, unemployment, and the agrarian crisis during budget discussions. Congress party chief Mallikarjun Kharge criticised the Economic Survey, calling it a "shiny hollow envelope" to hide the government's failures.

India is expected to be one of the fastest-growing economies in the Asia-Pacific region in 2024 and 2025, driven primarily by government spending rather than domestic consumption or exports.