Union Budget 2024: Continuity and Challenges

Finance Minister Nirmala Sitharaman is set to present her seventh consecutive Union Budget 2024, including the Interim one earlier this year. This continuity is remarkable, but there’s more to it. Let’s delve into the key points:

1. Fiscal Consolidation Path: Officials suggest that the full Budget will likely adhere to the fiscal consolidation path set in the Interim Budget, maintaining the fiscal deficit target for the current financial year at 5.1% of GDP. The robust GDP growth and a record dividend from the Reserve Bank of India provide support.
2. Tax Breaks vs. Welfare: There’s buzz about tax breaks for the salaried class, especially those at the bottom rung. Some argue that tax breaks are more effective than welfare schemes in boosting consumption by putting more disposable income in people’s hands.
3. Political Context: The National Democratic Alliance (NDA) is back in power for a third term, albeit with a reduced majority. Coalition dynamics and opposition promises of welfare add complexity.

Now, let’s delve into specific sectors and their expectations from Union Budget 2024:

1. Technology and Startups:
   • Tax Incentives: The technology sector expects tax incentives to boost research and development (R&D) spending. Startups hope for tax breaks to encourage innovation.
   • Ease of Doing Business: Simplified compliance procedures and reduced regulatory burden are crucial for startups and tech companies.
   • Infrastructure: Investments in digital infrastructure, including broadband connectivity, are essential for the growth of the tech ecosystem.
2. Healthcare and Pharmaceuticals:
   • Health Infrastructure: Strengthening healthcare infrastructure, especially in rural areas, is a priority. Increased allocation for hospitals, medical equipment, and telemedicine facilities is anticipated.
   • Pharma Sector: The pharmaceutical industry hopes for measures to enhance domestic manufacturing, reduce dependence on imports, and promote exports.
3. Agriculture and Rural Development:
   • Farmers’ Welfare: The agriculture sector expects support for crop diversification, irrigation, and better market access. Direct income support and crop insurance are critical.
   • Rural Infrastructure: Investments in rural roads, electrification, and sanitation are essential for overall development.
4. Real Estate and Housing:
   • Affordable Housing: The real estate sector looks forward to incentives for affordable housing projects. Measures to boost demand and liquidity are crucial.
   • REITs and Infrastructure Investment Trusts (InvITs): Encouraging investment in REITs and InvITs can unlock capital for infrastructure development.
5. Manufacturing and Export Promotion:
   • Export Incentives: The manufacturing sector hopes for export-friendly policies, including export credit availability and simplification of procedures.
   • Supply Chain Resilience: Strengthening supply chains and promoting domestic manufacturing are priorities post-pandemic.

In Conclusion: Balancing Continuity and Aspirations

As Finance Minister Nirmala Sitharaman unveils the Union Budget 2024, the nation awaits a delicate balancing act. The continuity in fiscal policies, coupled with targeted measures for sectors like technology, healthcare, and agriculture, will shape India’s economic trajectory. As citizens, investors, and entrepreneurs, we look forward to a budget that not only addresses immediate challenges but also lays the groundwork for a resilient and prosperous future.

Read More on:

1. Union Budget 2024: A Beginners Guide To The Union Budget (ndtv.com)

2. Union Budget 2024 highlights: Here’s the complete overview of Budget | Budget 2024 News – Business Standard (business-standard.com)

3. Union Budget 2024: FM Nirmala Sitharaman Budget Highlights that matters for India Inc, ETCFO (indiatimes.com)

Also Read: Financial Inclusion Initiatives with Fintech Collaboration in India