Nirmala Sitharaman’s Budget 2024 : What to Expect for Taxpayers”

Anticipation Surrounding the Interim Union Budget 2024 Scheduled for delivery on February 1 at 11 a.m., Finance Minister Nirmala Sitharaman is poised to present the final budget of the Narendra Modi administration’s second term, just ahead of the Lok Sabha elections. Expected to be fiscally responsible, the budget will likely emphasize infrastructure spending, balancing economic priorities with political messaging.

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As the tenure of Modi government 2.0 draws to a close, Sitharaman is expected to highlight the economic achievements of the past decade without announcing extravagant plans to curb the fiscal deficit. The interim budget is anticipated to serve as a blueprint for Prime Minister Modi’s economic vision for the next five years, essentially functioning as the BJP’s economic manifesto for the upcoming elections.

The interim budget for 2024 is predicted to offer a spectacle, coming only weeks before the implementation of the Model Code of Conduct. Economists project a reduction of at least 50 basis points in the current fiscal deficit target of 5.9% of GDP for 2024–2025.

Boost infrastructure capital expenditures.

A significant focus is expected on boosting infrastructure capital expenditures, which have been instrumental in driving India’s economic growth. The Modi administration is likely to allocate over 3% of GDP to infrastructure in the current year, with an additional 20% increase anticipated for 2024–2025.

The finance ministry’s review report predicts a nearly 7% growth in the Indian economy for the fiscal year 2024–25, driven by robust domestic demand. India aspires to achieve a GDP of USD 5 trillion in the next three years, aiming for an ambitious USD 7 trillion economy by 2030.

The status of the economy

Experts foresee adjustments in income tax policies, including higher exemption limits, support for female entrepreneurs, and a long-term tax strategy. Calls for uniform taxation across limited liability partnerships, corporations, and partnerships are also voiced. While this is an interim budget, signs of benefits from the full budget may emerge.

Notably, Section 87A could potentially raise the overall tax exemption limit from Rs 7 lakh to Rs 8 lakh, offering relief to individual taxpayers. Advocates for an equitable taxation landscape, such as Bharat Chamber of Commerce President NG Khaitan, stress the need for a comprehensive tax policy for businesses.

Income-tax

Senior economist Radhika Rao of DBS Group Research anticipates that the budget will prioritize inclusive and prosperous policies, aligning with the gradual roadmap toward India@100 over the next two decades.

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In line with tradition, the interim budget will encompass revised estimates for the current and upcoming financial years, providing an assessment of the economy’s current state, current and capital expenditures, and receipts. The budget will seek approval for essential expenditures until the polls through a vote-on-account.