The Interim Union Budget of India 2024-25, set for presentation on February 1, is a crucial financial plan addressing the nation’s economic needs and expectations across various sectors.
Interim Union Budget of India 2024
The Union Budget 2024 will be introduced by Indian Finance Minister Nirmala Sitram on February 1, 2024. this budget is called the interim budget for India. the central government of India introduces the union budget in the Lok Sabha.
The target of this budget is to put together a financial budget for the working government and have the Lok Sabha approve it. In this article, we are covering the Union Budget of India 2024.
Let’s delve into more about this interim budget. Brimming with optimism, India finds itself on a robust growth trajectory, promising a dynamic fiscal year ahead.
The upcoming financial chapter is crucial, demanding a delicate balance to sustain and elevate the momentum crafted thus far.
The spotlight is on the government to take bold, decisive steps that will fortify India’s economic standing, propelling it towards the coveted $5 trillion economy milestone at an accelerated pace.
The Reason for the Union Budget of India 2024
If we talk about the reason behind this temporary budget, due to the election this year, the finance budget will not be completely declared by the current government.
The winning government will work on this budget and put it into the Lok Sabha Sansad of India. Another reason behind this interim budget is that India’s last financial year will be completed in March 2024. After the complete financial year, all work will be stopped due to the budget,
so this interim budget targets only the important ministries of India, which play the most important role in the development of GDP. This budget is valid for a limited period whenever an election-winning government is not established in the central department of India.
Union Budget 2024 Date & Time
The Union Budget 2024 will be unveiled on 1 February 2024 by India’s Finance Minister Nirmala Sitaram under the leadership of Prime Minister Modi and other ministers. From 11:00 am Nirmala Sitaram will tell the Union Budget of India and this budget will be presented after the elections.
What is the Method used for the interim union budget?
The government uses the Vote-An-Account passed through the interim budget and seeks parliamentary approval for the government to meet expenses for a part of the fiscal year.
What is the Union Budget of India 2024?
The Union Budget is introduced every financial year by the central working government. Our last financial year starts in April 2023 and ends in March 2024. This budget is introduced for the 2024–2025 financial year.
This budget determines the development and GDP growth conditions of the central government. Funding is provided by the government for the Ministry,
which is working for development in India and provides some benefits for Indian citizens like job opportunities, tax duty relief, etc., and other useful things.
How to Decide Union Budget By Government
A union budget process for the new financial year is prepared by the Ministry of Finance in consultation with Niti Aayog and other ministries.
The Department of Economic Affairs (DEA) of the Finance Ministry is also responsible for budget production. this process starts every August through September and takes six months from the present date. In this process,
all ministries are given certain budget data for development and renovation. in this process, ministries’ consolation proposal process, budget meetings, circular issuance to all ministries, etc.,
the finance minister gives the data to the prime minister for approval. Then the government introduces the financial budget in front of the Lok Sabha, and after analysis and a process completed by the Lok Sabha, they will approve it.
What is budget and its types?
The government has Several types of budgets in India which provide economic growth for India. Some budget are
- Balanced budget
- Deficit budget
- Expenditure Budget
- Zero-based budgeting
- Finance Act
- Receipt Budget
- Financial statement
- Appropriation bill
- Detailed Demands for Grants
How does the Union budget benefit us?
According to Articles 112-117, the parliament has the power to enact the budgets. the objective of the budget is to provide resources and employment, reduce tax income, change the tax structure, regularly maintain prices, and check them.
The budget plays the main responsibility in the growth of GDP. Elevating consumption is a key concern for India, especially with private final consumption representing 61% of the GDP.
Unfortunately, the growth in this area has hit a low of 4.4% in the current fiscal year, the lowest since FY2003. The primary culprit? A sluggish rural demand.
While signs of improvement are on the horizon, more focused efforts are needed. A clear agenda involves injecting more money into the hands of rural communities, possibly through increased allocations to MNREGA.
However, for sustainable and fundamental change, the spotlight should shift to boosting agriculture productivity. This entails reducing input costs, enhancing yields, exploring higher-value crops, and refining value chains to slash marketing expenses.
Better rural connectivity is also pivotal. Adopting digital farming, and incorporating smart irrigation systems, could be a game-changer in optimizing water usage, crucial in the face of impending climate change.
Addressing efficiency can further cut down the hefty farm subsidy, currently standing at 2% of India’s GDP.Urban consumption has been a stalwart supporter of India’s current growth, hitting an impressive 7.4%, a three-year high.
Notably, per-capita urban consumption is twice that of rural areas. To counter any slowdown in rural consumption, despite budgetary efforts, a boost in urban consumption becomes crucial.
This calls for creating more spending opportunities, particularly on significant items like housing, computers, and various goods. The government can facilitate this by enhancing the new tax regime, currently a bit restrictive.
Introducing key deductions, such as those for home loan interest, can play a pivotal role in encouraging urban spending and sustaining overall economic growth.
Union Budget 2024 Focusing on investing in infrastructure.
The growth in the economy this year is mostly because we invested a lot in building things like roads, railways, and metros – making it 9.3% higher. This is good news, and we should keep investing about 33% of our budget in such projects.
It’s like planting seeds that grow into more money for everyone (3.5 times more, to be exact). But, our government can’t do it all alone; we need help from private companies too.
Right now, the government does 85% of the work, but we should aim for a more balanced 50-50 partnership. To encourage companies to join in, we can learn from countries like Malaysia and simplify our tax rules.
We also care about the environment, so we want to build things in a way that doesn’t harm it. Instead of old-fashioned projects, we want to focus on areas like ports, waterways, and digital stuff.
And don’t forget our smaller cities! We planned to spend Rs. 10,000 crores on their development, but only Rs. 280 crores have been used so far. Let’s make our cities smarter with cool ideas like IoT, AI, and GIS as part of our Viksit Bharat strategy.
Boosting export growth In India
India is doing well in selling services to other countries, thanks to a 6% growth in Global In-house Centers. But, when it comes to selling goods abroad, especially last year, it didn’t go so great.
The government says our exports caused a big drag on our economy. To fix this, we need to sell more things more smartly, like joining the Global Value Chain. There’s a plan in place called PLI, where the government sets aside a lot of money for different sectors.
But, so far, they’ve only spent a small portion, mostly on mobile phones. We should rethink this plan and make it work better.
We also need a clear strategy to sell our stuff to big markets like the US. Right now, we’re not doing as well as countries like Vietnam and Indonesia. To compete, we need to make it easy for companies to set up shop here, just like Vietnam is doing.
The government should be careful with spending money and focus on using the taxes wisely. People expect them to be smart with money and not just spend on popular things.
What is the Fiscal deficit target expectation?
- Lower Fiscal Deficit
- Higher Capex
- Decrease Fiscal Deficit in FY25-26 in 4.5%
What is Target Prioritizing Infrastructure Investment?
On this Budget expectation is :
- Hire allocation for Rural and Urban Connectivity
- Higher Allocation for Railways and Highways
- hire Allocation for Ports
Union Budget of India 2024 Expectations for Different Sectors
Hospitality and Tourism:
- Lower Interest and Loan
- Lower Water/electricity Tariff
- GST Parity for restaurants and Dine-In Hotels
- Central Single Window Clearance System
Defence:
- Higher Capex Outlay is likely
- higher procurement of military drugs and electronic warfare systems.
- Higher budget allocation in the last several years
Health and Pharma:
- GST Parity for Apis and Formulations
- extension of Concessional Tax for Manufactures
- Reduction Of GST in Healthcare Education
- Grants for Healthcare training institute
- Incentive Health Insurance
Railways:
- Record High Allocation Expected
- Special Attention on Safety
- modernisation, Electrification and Solar Panel installation
- Expansion of Vande Bharat
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Agriculture:
- Higher Productivity
- Digitization
- Strengthening Post-Harvest infrastructure
- Improve Storage infrastructure and Mandis
- Higher Fertiliser Procurement
- Thrust on organic farming
Automobile:
- PLI Boost likely
- Incentive For Scrappage Policy
- Promote R&D in EV segment
READ ALSO: Tata Steel Posts Q3 Profit Lower costs offset weak revenue.
Union Budget of India 2024 Importance of the Human Angle in Budgets:
- Holistic Impact Beyond Finances:
- Budgets, commonly seen as financial plans, also significantly impact social issues like malnutrition.
- Central Role in Economic Growth:
- The well-being of women, children, and education directly influences worker productivity and overall well-being, crucial for economic development.
- Literate Population and Economic Growth:
- Higher literacy is vital for business and economic growth in both developed and developing economies.
- Tech-Driven Landscape:
- In today’s tech-driven world, skill development, especially among the youth, is crucial for economic expansion.
- Youth Skilling Programs:
- Recent budgets emphasized training and apprenticeship programs to skill the vast youth population.
- Stagnant Education Expenditure:
- Despite increased budget allocations, the expenditure on education as a percentage of GDP has remained stagnant at 2.9% since 2019.
- National Education Policy Goal:
- The National Education Policy recommends a budgetary allocation of 6% of GDP to education, a goal yet to be achieved.
Expectations for Esports Industry:
- Evolution of Esports:
- Esports has evolved beyond a game to a multi-sport event, aspiring for inclusion in prestigious competitions like the Asian Games and the Olympics.
- Government Support:
- Anticipates fair support and conducive policies from the government to nurture esports growth, develop infrastructure, and promote talent.
Union Budget of India 2024 AI and Tech Landscape:
- Increased AI Investment:
- Calls for significant government investment in AI, particularly in emerging research domains.
- Key Focus Areas:
- Advocates for attention to quantum computing, digital nudges, Explainable AI, Gen Chem and Computational Biology, and smart cities.
- Transformative Possibilities:
- Believes allocating resources to these areas can unlock transformative possibilities for India’s AI and tech sector.
Promoting Startups through Tax Policies:
- Innovative Tax Policies:
- Suggests innovative policies like tax rebates or exemptions for entrepreneurs establishing startups within universities.
- Benefits of the Approach:
- Aims to incentivize entrepreneurship, contribute to the government’s tax base expansion, and foster an innovation-friendly environment.
Union Budget of India 2024 Expectations from HR & Staffing Industry:
- Focus on Employee Welfare:
- Anticipates measures centered around employee welfare, taxation, job creation, compliance simplification, and modernized labor codes.
- Industry Evolution:
- Highlights the evolving role of HR from a standalone function to a strategic business partner.
- Skilling Programs and Flexibility:
- Urges increased financial allocation for structured skilling programs, deductions for training courses, and flexibility in labor laws.
- Gender Inclusivity and Economic Growth:
- Advocates for measures encouraging women’s participation in the workforce for balanced professional landscapes and sustainable employment.
- Dynamic HR Landscape:
- Envisions HR playing a more strategic role integral to organizational success in India’s evolving economic environment.
- Budget’s Role in Economic Growth:
- Look to Union Budget 2024 for a robust roadmap sustaining economic growth and generating new job opportunities across sectors.
Union Budget of India 2024 Smartphone Manufacturers Budget Expectations:
- HMD Global’s Optimistic Outlook:
- Ravi Kunwar, VP at HMD Global, is optimistic about the Indian smartphone market.
- Aims for potential extensions or enhancements to the Production Linked Incentive (PLI) policy.
- Wish list for Budget:
- HMD Global’s wish list includes increased incentives for local production, support for components manufacturing in India, and a push for exports.
- Focus on Stability and Growth:
- Looks forward to a budget that builds upon existing policies, fostering stability and growth in the smartphone industry.
- Commitment to Self-Reliance:
- Remains dedicated to contributing to India’s self-reliance and global success in the smartphone sector.
Union Budget of India 2024 Semiconductor PLI and AI Servers:
Sanjay Lodha’s Perspective (CMD at Netweb Technologies):
- Praises the success of India’s PLI scheme and anticipates further enhancement.
- Emphasizes the importance of Semiconductor PLI to reduce electronics imports and enable exports.
- Stresses the significance of data localization for security implications.
- Highlights AI as a transformative technology impacting various fields, advocating for made-in-India AI servers to meet future demands.
Union Budget of India 2024 Tourism Industry Expectations:
Incentives for Midscale and Economy Hotels:
- Jayant Singh, Founder of TreeHouse Hotels, urges incentives for midscale and economy hotels, similar to those given to the manufacturing sector.
- Proposes special interest rates and electricity subsidies to encourage the development of affordable hotels in key destinations.
Union Budget of India 2024 Gaming Sector:
GST Concerns for Gaming Companies:
- Payal Thaker from BDO India highlights concerns in the gaming sector’s GST regime.
- Points out the industry’s struggle with 18% GST on platform fees, hoping for a favorable ruling from the Supreme Court.
- Advocates for a more favorable tax regime to boost the industry’s growth potential.
READ ALSO: Indian Automotive Industry Growth Beats Japan on Vehicle Market.
Conclusion:
Union Budget is a budget which depends on The economy of our country. it plays a main role in increasing GDP. if GDP increases, then growth will also increase, which is a good sign for the country’s development.
in this article, all data is taken from a reputed site and an expectation analysis. If you have information related to this article, then drop your suggestion in the comment box.
