The budget is anticipated to bolster domestic factors to support the nation’s economy and promote global growth amid unrest and uncertainty.
IDBI Bank Deputy Managing Director Mr Suresh Khatanhar on Budget 2024
The budget, scheduled to be presented on February 1st, will probably centre on sustaining the economic recovery despite global obstacles to reach the goal of a $5 trillion GDP in the upcoming years.
Measures will bolster domestic manufacturing, promote rural development, develop social infrastructure, lure foreign investment, and build upon previous budgets.
The budget may prioritize further streamlining Bankruptcy and Insolvency Code regulations and reevaluating the National Asset Reconstruction Company and India Debt Resolution Company’s organizational structures to promote smooth economic credit flows, given the banks’ crucial role.
Preliminary budget announcements will probably focus on keeping India one of the fastest-growing major economies and pushing it to become the third-largest GDP (at $5 trillion) by 2027–2028. The budget is anticipated to bolster domestic factors to support the nation’s economy and promote global growth during unrest and uncertainty.
There may be increased efforts towards developing new and emerging sectors to protect itself from the turmoil in the world and promote medium-term growth. To propel manufacturing growth into the next stage, there will be a focus on increased funding allocation for upscaling and vocational training in selected sectors and programs like production-linked incentives.
Sustained efforts to streamline laws and procedures to facilitate business dealings will contribute to developing a favourable atmosphere and protecting the national economy from outside shocks. The budget is anticipated to prioritize increasing exports to various new and diverse markets and stimulating domestic demand to support manufacturing.
Capital spending on infrastructure, currently concentrated on building roads and railroads, will probably expand to include building ports and shipping, energy, and urban infrastructure. Announcements of tax breaks and incentives to draw in foreign investment may be made. Tax policies are anticipated to increase disposable income and savings, which may multiply the impact on domestic demand.
A sustainable future is a top priority for the government, so announcements about sustainable finance are likely to come, particularly about MSME (micro, small, and medium-sized enterprises) financing. It is anticipated that digital banking and improved access to financial services—mainly via digital channels—will take centre stage.
Announcements about the fintech industry, which has grown to be a significant stakeholder, might be made to give them the right incentives to expand their role and support more established players in the market.
The government is anticipated to convey through the budget its intention to stick with a prudent fiscal management strategy, emphasizing increased capital expenditures bolstered by solid tax receipts.
It is generally anticipated that the government will be able to meet its FY24 budget deficit target of 5.9 per cent of GDP and will be on track to announce a more stringent budget deficit target for the following year.