Budget 2023: Nirmala Sitharaman will present the Union Budget today
New Delhi:
The Union budget for FY2024, to be presented by Finance Minister Nirmala Sitharaman, will lay the foundation for bringing India’s economic growth to the projected rate of 6.8 percent. This is Ms. Sitharaman’s fifth household presentation since 2019.
Here’s your 10-point cheat sheet on this great story:
Predictably, the Indian middle class is looking for some form of income tax breaks. Although the tax limit has not changed and no new deduction was announced last year, inflation has eaten away at people’s incomes. You haven’t seen a change in the tax rate since 2017-18 and in the tax panel since July 2014.
Ms Sitharaman may be able to afford a balanced non-populist budget with general elections a year and another Union budget away. As Prime Minister Narendra Modi’s BJP hopes to win a third consecutive term, massive welfare programs for farmers and the rural population cannot be ruled out.
The Treasury had considered raising the below 80C limit, which includes investments in life insurance, time deposits, bonds, housing and public provident funds. When this happens, it will encourage saving and help collect rainy day funds from people whose savings were eroded at the height of the COVID-19 pandemic.
Markets in India – Asia’s third largest economy – will be watched closely as Ms Sitharaman begins her budget speech at 11am. Adani Group companies led most of the volatility over the past week but Tuesday’s follow-up sale of Rs 20,000 crore sailed through, bringing relief to the group, which is facing fraud allegations by US-based short seller Hindenburg.
The Modi government could strengthen its “Make In India” and “Atmanirbhar Bharat” policies by giving financial benefits to manufacturers and suppliers who want to establish themselves in the country. India has advertised itself as an alternative to China in the global supply chain.
The real estate sector, which has slumped during the pandemic, expects the center to announce favorable regulations and tax breaks to boost its fortunes after a slow but sure recovery over the past year. In 2019, the Goods and Services Tax (GST) lowered the tax rate on affordable homes from 8 percent to 1 percent. The industry expects similar announcements in this budget.
More than half of the Indian population is under 30 years old. For them, the focus would be job security and reduced taxes on products they prefer to buy, such as electronics. Better conditions for educational loans and other financial aid for schools and colleges are being followed with great attention.
The agricultural sector experienced difficult times in 2022 due to global supply problems, unusual rains and floods, climate change impacts and the war in Ukraine. Ms. Sitharaman would probably have something to cushion her from all these shocks. After all, farmers form a large and influential electoral base.
Ms. Sitharaman could pick up where she left off with the “digital rupee,” first heralded in last year’s budget as a possible alternative to cryptocurrencies. Crypto trades have recently become very popular around the world, albeit risky as there is a gray area of regulation. The Minister of Finance can give a status update on the “digital rupee”.
A Bloomberg briefing on what to expect includes expanding the long-term capital gains tax on immovable property and unlisted shares, compensating oil traders for selling fuel below market prices, reducing import taxes on gold to 10 percent, and curbing illicit shipments and increasing defense budgets in light of border tensions with China.
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