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Eye on growth, big announcements ahead of 2024 polls

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Eye on growth

Budget 2023: Nirmala Sitharaman will present the Union budget today

New Delhi:
The Union budget for the financial year 2024, to be presented by Finance Minister Nirmala Sitharaman, will lay the groundwork to lift India’s economic growth to the projected rate of 6.8%. This is Ms. Sitharaman’s fifth budget presentation since 2019.

Here’s your 10-point cheat sheet for this big story:

  1. Predictably, the Indian middle class is seeking some form of income tax relief. Although the tax bracket was not changed and no new deductions were announced last year, inflation has eaten away at people’s incomes. They haven’t seen a tax rate change since 2017-18 and a tax slab since July 2014.
  2. Mrs. Sitharaman may be able to afford a balanced budget, not a populist one since the general election is still a year away and one more budget from the Union. Yet, as Prime Minister Narendra Modi’s BJP hopes to win a third consecutive term, massive social programs for farmers and the rural population cannot be ruled out.
  3. The Department of Finance had considered raising the limit under 80C, which includes investments in life insurance, time deposits, bonds, housing, and the public provident fund. If this happens, it will encourage savings and help raise funds for rainy days for people whose savings were eroded during the height of the COVID-19 pandemic.
  4. Markets in India – Asia’s third-largest economy – will be closely watched when Ms. Sitharaman begins her budget speech at 11 a.m. Adani Group companies led most of the swings last week, but on Tuesday its follow-on share sale of Rs 20,000 crore was completed, bringing relief to the group which is facing fraud allegations made by the American short seller Hindenburg.
  5. The Modi government could bolster its “Make In India” and “Atmanirbhar Bharat” policies by giving financial incentives to manufacturers and suppliers who want to set up shop in the country. India has presented itself as an alternative to China in the global supply chain.
  6. The real estate sector, which has plunged during the pandemic, expects the center to announce favorable schemes and tax breaks to improve its luck after a slow but sure recovery last year. In 2019, the Goods and Services Tax, or GST, council reduced the affordable home tax rate from 8% to 1%. The industry also expects similar announcements in this budget.
  7. More than half of India’s population is under 30 years old. For them, the focus would be on job security and lower taxes on products they prefer to buy, such as electronics. Better terms for student loans and other forms of financial aid for school and higher education will be closely watched.
  8. The agricultural sector has gone through difficult times in 2022 due to global supply problems, unseasonal rains and floods, the effects of climate change, and the war in Ukraine. Mrs. Sitharaman would probably have something to cushion them from all these shocks. After all, farmers are an important and influential electoral base.
  9. Ms. Sitharaman can pick up where she left off on the “digital rupee”, which was first announced in last year’s budget as a possible alternative to cryptocurrencies. Crypto transactions have become very popular lately across the world, although risky as there is a gray area of ‚Äč‚Äčregulation. The Minister of Finance can give an update on the “digital rupee”.
  10. A Bloomberg dossier on what to expect includes extending long-term capital gains tax to real estate and unlisted stocks, compensating oil retailers for the sale of fuel below market prices, the reduction of import taxes on gold to 10% to curb illegal shipments, and an increase in the defense budget in the context of border tensions with China.
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