Budget 2024 Expectations Live: Economic Survey projects real GDP growth of 6.5–7% in FY25

The Union Budget for 2024-25 will be presented by Sitharaman on Tuesday. Read more

Find the Economic Survey for 2023-24 here.

businessline compiled some expectations from key players in the farm sector.

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Tamil Nadu Chief Minister MK Stalin on Sunday submitted to the Centre a wish list of various rail and road projects for the State to be included in the Union Budget 2024-25, which will be presented in the Parliament on Tuesday.

“We believe that the upcoming budget will likely support the vision of “Viksit Bharat” by 2047, following a transformation similar to the one seen in the last decade. With the formation of the NDA 3.0 government, there are increasing expectations from the market for some allocation to address rural challenges and a potential cutback on capital expenditure. The budget is expected to strike a balance between capital expenditure and addressing rural challenges. Moreover, a higher-than-expected RBI dividend has provided some flexibility to progress further with welfare schemes. We anticipate that the government’s priority will continue to be achieving and maintaining macro stability by following a path of fiscal consolidation while balancing growth and stability. We expect the fiscal deficit for FY25 to be kept below 5.1%, with a goal of reaching 4.5% by FY26. Currently, the market is closely monitoring developments related to the capital gains tax. Any deviation from market expectations could lead to some short-term unfavourable reaction, although the likelihood of this happening seems low.”

The Budget expectation this time from the private sector is about how the mandated 70% of total defence expenses via domestic procurement can be segregated between the public and private sectors in India, says Ashish Rajvanshi, CEO of Adani Defence & Aerospace, in conversation with businessline’s Dalip Singh

“The Indian media and entertainment (M&E) industry is flourishing, bolstered by the surge in OTT platform usage, governmental support for digital infrastructure, and the ever-growing enthusiasm for cinema. Despite numerous tax reforms introduced over the years, several critical issues remain that need to be addressed in the upcoming Union Budget.

One major challenge involves the TDS (Tax Deducted at Source) system. Currently, taxpayers face significant difficulties in reconciling TDS with their income due to timing differences. To alleviate this burden, it would be beneficial if the Income-tax Act allowed for TDS credit as reflected in Form 26AS for the corresponding year.

Advertising agencies also face hurdles with the existing TDS framework, which impacts their cash flow due to TDS being applied to the gross billing amount. Lowering the TDS rate on payments from advertisers to these agencies would help ease this financial strain.

Additionally, payments to foreign satellites and data centers are presently classified as royalty or fees for technical services, making them subject to withholding tax. Clarifying that these payments are not taxable in this manner would greatly assist M&E companies utilizing these services.

Moreover, the rules for carrying forward losses during company amalgamations should be expanded to include M&E sector companies, fostering growth and consolidation within the industry.

On the GST front, implementing the proposed changes from the recent GST Council meeting, such as the amnesty scheme for waiving interest and penalties and reducing pre-deposits for filing appeals, would significantly reduce ongoing litigations and create a more supportive business environment.

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Listen to this State of the Economy Podcast, businessline’s PT Jyothi Datta talks to Shuchi Ray, Partner at Deloitte India, on the current state of healthcare in India, and the sector’s expectations from the upcoming Budget.

Association of Indian Medical Device Industry (AIMED) wishlist also hoped the upcoming Budget ’24 would announce income tax benefits tailored to expenditure on capacity expansion and research and development investments by medical device companies.

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The government is now set to present a revised Union Budget for FY25, which will supersede the interim budget presented earlier in Feb-24. The newly appointed government will be expected to continue with policy focus on prudent fiscal management and fiscal glide path to achieve fiscal deficit of 4.5% by FY 26. This augurs well for overall macro-stability for transitioning towards the goal of Viksit Bharat by 2047.

I believe the Union Government budget should focus on five key priorities for the upcoming Union Budget

- Commitment towards fiscal discipline needs to get reiterated and will boost India’s fiscal image at a time of global bond inclusion. A sovereign rating upgrade over next two years will lower the cost of borrowing for all economic stakeholders in the country.

- Viksit Bharat requires scaling up of financial intermediation in a sustainable manner. There is an urgent need to accelerate deposit mobilization by the banking system. The FY25 Union Budget (along with support from the RBI) could look at providing a level playing field to bank deposits vis-à-vis other competing instruments by incentivize deposit mobilization through lowering tax incidence on FDs.

- Indian banks have been spending 6-8% of total operating expending on technology. This is lower than the global average of 10-12%. With government’s focus on digitization and financialization of the economy and boosting cyber security, Indian banking system needs to meaningfully scale up the technological infrastructure to be future ready. (deeper penetration of digital payments, adoption of CBDC, rapid use of AI in customer service etc). FY25 Union Budget could offer some tax rebates for scaling up technological infrastructure.

- Job creation needs to be is a top priority for the policymakers to help maximize India’s demographic dividend and sustain GDP growth close to 8%. (as per the UN, India’s working age population is expected to peak around 2040). The Union Budget needs to be multi-dimensional prioritising filling of government jobs, existing PLI Scheme to reinvigorate labour intensive sectors (esp. involving the SMEs) like textiles, leather, tourism etc, doubling increasing allocation towards education from close to 3% currently of GDP to around 6%.

- Supporting demand side economic activity through private consumption will not just raise demand at the bottom of pyramid, but it would also help the fiscal revenue by boosting indirect tax collections. The Budget could consider increasing targeted allocation for affordable housing under the PMAY Scheme while also providing tax incentives to home loan borrowers for developers. Scaling up of agriculture infrastructure and encouraging ‘farm tourism’ will also provide a strong impetus to rural incomes. 

The Union Budget needs to set the tone for economic momentum for the next five years. This will involve a fine balancing between preserving of fiscal discipline, boosting inclusive consumption, and incentivizing financial savings, private investment, and exports.

With the issue of the minimum support price (MSP) once again taking the front burner, perhaps the time has come for the government to consider a revamp in the present, and look out for future alternatives for sustainable agriculture growth in the country, especially as the 2024 budget comes into action. 

​Rajesh Aggarwal, Managing Director, Insecticides (India), writes​

Experts believe these trends clearly highlight that people are holding their investments for longer durations while keeping old age security in mind. They expect reform in capital gain calculation norm in the budget.

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From ₹3.3 lakh crore in FY19, capex allocation compounded at 27 per cent CAGR to the current ₹11 lakh crore allocation. For comparison, the allocation grew at 9 per cent CAGR in the FY14-19 period. The last five years clearly indicate a government spending push. This was aimed at dragging the economy out of Covid blues and putting it on a growth path.

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1. Further simplification of personal tax regime
2. Overhaul of Capital Gains tax structure
3. Housing: One could expect an enhancement in the existing limit for deduction of interest on housing loan for self-occupied property from ₹2 lakh to ₹3 lakh per financial year.
4. Other expected measures include reverting to the previous deadlines for filing belated or revised tax returns, introducing a provision for tax treaty relief at the withholding stage by employers, clarifying the treatment of Tax Collected at Source (TCS) paid by employees during tax withholding, expediting the resolution of pending appeals and establishing accountability provisions for taxpayers’ interactions with the CPC regarding grievances and other issues.

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