Budget 2023: Nirmala Sitharaman will present the Union Budget today
New Delhi:
The Union Budget for fiscal 2024, to be presented by Finance Minister Nirmala Sitharaman, will set the foundation for taking India’s economic growth to the forecast rate of 6.8 per cent. This is Ms Sitharaman’s fifth Budget presentation since 2019.
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Predictably, India’s middle class is looking for some form of income-tax relief. Though the tax slab wasn’t changed and no new deduction was announced last year, inflation has eaten into people’s earnings. They haven’t seen a change in tax rate since 2017-18 and in tax slab since July 2014.
Ms Sitharaman may be able to afford a balanced, not a populist, Budget since the general election is still a year and one more Union Budget away. Still, with Prime Minister Narendra Modi’s BJP hoping to win a third consecutive term, massive welfare programmes for farmers and the rural population can’t be ruled out.
The Finance Ministry had been considering increasing the limit under 80C, which includes investment in life insurance, fixed deposit, bonds, housing and public provident fund. If this happens, it will encourage savings and help raise rainy day funds of people whose savings were eroded at the height of the COVID-19 pandemic.
The markets in India – Asia’s third-biggest economy – will be closely watched when Ms Sitharaman begins her Budget speech at 11 am. Adani group companies led most of the fluctuations last week, but on Tuesday its Rs 20,000 crore follow-on share sale sailed through, bringing relief to the group that’s facing allegations of fraud made by US-based short-seller Hindenburg.
The Modi government may strengthen its “Make In India” and “Atmanirbhar Bharat” policies by giving financial benefits to manufacturers and suppliers who want to set up shop in the country. India has been advertising itself as an alternative to China in the global supply chain.
The real estate sector, which nosedived during the pandemic, expects the centre to announce favourable schemes and tax breaks to improve its luck after a slow but surefooted revival last year. In 2019, the goods and services tax, or GST, council cut the tax rate on affordable houses from 8 per cent to 1 per cent. The sector expects similar announcements in this Budget too.
Over half of India’s population is under 30. For them, the focus would be on job security and reduced tax on products that they prefer to buy, such as electronic goods. Better terms for education loans and other forms of financial help for school and higher education will be keenly watched.
The farm sector went through difficult times in 2022 due to global supply problems, unseasonal rains and floods, effects of climate change and the war in Ukraine. Ms Sitharaman would likely have something to cushion them from all these shocks. After all, farmers make for a large and influential voter base.
Ms Sitharaman may pick up from where she left on “digital rupee”, which was first announced in last year’s Budget as a possible alternative to cryptocurrencies. Crypto trades have in recent times become wildly popular across the globe, albeit risky since there exists a grey area of regulation. The Finance Minister may give a status update on “digital rupee”.
A Bloomberg brief of what to expect includes extension of long-term capital gains tax to immovable property and unlisted shares, compensation to oil retailers for selling fuel below market prices, cut in import taxes on gold to 10 per cent to rein in illegal shipments and increase in defence budget amid border tensions with China.
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