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Union Finance Minister Nirmala Sitharaman is set to present the Union Budget 2024 on July 23. This will be the first budget of the newly elected NDA government, led by Prime Minister Narendra Modi. Expectations are high among the common man, middle class, and salaried individuals for significant income tax relief and economic reforms. Stay updated with our live coverage of the Economic Survey to understand how these expectations will shape the future of the Indian economy.
Union Budget 2024 Expectations: Income Tax Expectations
The most anticipated change in the Union Budget 2024 is the revision of income tax slabs. The middle class and salaried employees are hoping for a reduction in tax rates and an increase in the standard deduction. Such changes are expected to enhance disposable income and boost consumer spending, driving economic growth. Experts believe that providing relief in income tax can lead to increased savings and investments, stimulating various sectors of the economy.
Union Budget 2024 Expectations: MSME Expectations
Vivek Jalan, Partner at Tax Connect Advisory Services LLP, highlights the robust growth of the Indian economy, estimated at 8.2% in FY24. This growth follows impressive rates of 9.7% and 7.0% in previous years. The Economic Survey indicates that this growth is not merely due to a low base effect but represents genuine economic expansion.
Micro, Small, and Medium Enterprises (MSMEs) are crucial for employment generation and GDP growth. The Union Budget 2024 is expected to offer significant relief to MSMEs by reducing compliance burdens. This includes relaxing TDS/TCS requirements and ensuring faster payments under the Income Tax Act. Such measures will enhance the ease of doing business for MSMEs, allowing them to contribute more effectively to the economy.
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Union Budget 2024 Expectations: Banking Industry Insights
Jyoti Prakash Gadia, Managing Director at Resurgent India, notes the Economic Survey’s emphasis on the healthy balance sheets of banks. This healthiness creates opportunities for improved credit dispensation, which is essential for fueling growth in various sectors. The survey calls for the development of broader and deeper capital markets to support long-term funding. This is crucial for achieving an advanced economic status over the next 25 years.
Additionally, the survey stresses the need for immediate changes in skill development programs and education policies. These changes are vital for creating jobs and ensuring that the workforce has the necessary skills to support economic growth.
Union Budget 2024 Expectations: Economic Growth Projections
Ranen Banerjee, Partner at PwC India, reports the Chief Economic Advisor’s cautious projection of a 6.5-7.0% growth rate for FY25. This projection takes into account global uncertainties and domestic challenges. The Economic Survey suggests a compact between the central and state governments, the corporate sector, and academia to address these challenges.
The survey encourages the private sector to invest in intellectual property, machinery, and equipment. It also nudges academia to provide the necessary skills and knowledge for intellectual property creation. There is an acknowledgment of the challenges faced by exports, manufacturing, and small and medium enterprises. The survey hints at the need to lower the emphasis on manufacturing and also adopt agriculture as a significant job generator.
Union Budget 2024 Expectations: Aviation Sector Hopes
Kanika Tekriwal, CEO of JetSetGo, anticipates customs exemptions for Non-Scheduled Operators, akin to those available for scheduled air operations. This step would streamline the import process and level the playing field, allowing NSOs to operate more competitively and efficiently.
The current tax structure on aviation fuel significantly increases operational costs, particularly for NSOs operating on tighter margins than larger scheduled airlines. Bringing aviation fuel under the GST regime would reduce operational costs and enhance overall efficiency. If the Union Budget 2024 supports these expectations, it would positively impact the growth and sustainability of the private jet and aviation industry.
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Union Budget 2024 Expectations: Gold Industry Expectations
Sachin Kothari, Director of Augmont, expects a reduction in gold import duty from 15% to 10% and parity in silver import duty. The industry seeks streamlined imports through the India International Bullion Exchange (IIBX) and benefits for the jewellery export sector.
Market participants also desire a single regulator for the gems and jewellery market, currently regulated by multiple agencies including SEBI, RBI, and DGFT. Establishing a Jewellery Export Center at GIFT City and permitting EMI on jewellery purchases are also key expectations. Additionally, the market hopes for tax-free interest income on Sovereign Gold Bonds to attract more investors.
Union Budget 2024 Expectations: Electronics Export Strategy
Sharan Maini, Director of Veira Group, hopes for policies supporting an export-driven strategy in electronics, particularly televisions. Streamlining supply chains and prioritizing the localization of components can strengthen the manufacturing ecosystem and boost exports.
Supporting domestic production is essential for reducing dependence on overseas suppliers. A supportive environment that encourages innovation and simplifies business operations can enhance India’s position in global electronics manufacturing. Implementing these measures can help India become a key player in the electronics market, serving both domestic and international customers.
Union Budget 2024 Expectations: Sustainability Initiatives
Dr. Miniya Chatterji, Founding Director of Anant School for Climate Action, advocates for investments in renewable energy, green infrastructure, and sustainable agriculture. Reducing GST on renewable energy components and promoting skills in sustainability are crucial steps.
The Union Budget 2024 should focus on driving sustainable growth by prioritizing initiatives that support environmental conservation. This includes investments in renewable energy projects and green infrastructure. Promoting sustainable agriculture can also play a significant role in achieving long-term economic and environmental goals.
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Union Budget 2024 Expectations: Pharma Sector Support
Ajay Kakar, CEO of Salve Pharmaceuticals, emphasizes the need for investment in research and development (R&D) to foster innovation in the pharmaceutical industry. Policies that speed up the approval processes for new drugs and provide financial incentives for drug development are essential.
The Union Budget 2024 should focus on creating a conducive environment for pharmaceutical companies to invest in new technologies and develop innovative products. This will not only boost the industry but also ensure the availability of advanced healthcare solutions for the population.
Union Budget 2024 Expectations: Tax Stability
The Confederation of Indian Industry (CII) appreciates the government’s effort to maintain stable tax rates. In its pre-Budget 2024 memorandum, CII suggests keeping corporate tax rates unchanged to provide certainty for businesses. Stable tax rates are crucial for attracting investments and ensuring a predictable business environment.
Maintaining tax stability can enhance investor confidence and promote long-term economic growth. Businesses can plan their investments better, leading to sustained economic development.
FAQs on Union Budget 2024 Expectations
What are the key expectations from the Union Budget 2024 for income tax relief?
The key expectations from the Union Budget 2024 for income tax relief include a reduction in tax rates, an increase in the standard deduction, and overall tax slab revisions. These changes are anticipated to increase disposable income, boost consumer spending, and stimulate economic growth.
How will the Union Budget 2024 impact MSMEs?
The Union Budget 2024 is expected to significantly benefit MSMEs by reducing compliance burdens, such as relaxing TDS/TCS requirements and ensuring faster payments under the Income Tax Act. These measures aim to improve the ease of doing business for MSMEs, enabling them to contribute more effectively to the economy.
What are the banking industry's expectations from the Economic Survey mentioned in the Budget 2024 updates?
The banking industry expects the Economic Survey to emphasize healthy bank balance sheets, which can enhance credit availability and support growth in various sectors. Additionally, the survey calls for the development of broader and deeper capital markets and updates to skill development programs to create jobs and ensure economic growth.
What initiatives are expected in the Union Budget 2024 to promote sustainability?
The Union Budget 2024 is expected to prioritize initiatives that drive sustainable growth. These include investments in renewable energy projects, green infrastructure, and sustainable agriculture. Reducing GST on renewable energy components and promoting skills in sustainability are also key expectations.
How might the Union Budget 2024 support the pharmaceutical industry?
The Union Budget 2024 is anticipated to support the pharmaceutical industry by encouraging investment in research and development (R&D) and speeding up approval processes for new drugs. Providing financial incentives for drug development is also expected, fostering innovation and ensuring advanced healthcare solutions are available for the population.
