Image Source : INDIA TV Union Finance Minister will present her sixth consecutive Union Budget today
Budget 2024: Finance Minister Nirmala Sitharaman is set to present the interim Budget, highlighting the achievements of the Modi government over the past 10 years and providing insights into future plans to transform India into a developed nation by 2047.
All eyes are on whether Sitharaman will present a populist budget, leaving more money in the hands of the common man, or if she will prioritise the reform agenda by adhering to the fiscal glide path to reduce the fiscal deficit to 4.5 per cent of GDP by 2025-26.
This marks Sitharaman’s sixth consecutive budget presentation. In her first budget in 2019, she replaced the traditional leather briefcase, which had been in use for decades for carrying budget documents, with a traditional ‘bahi-khata’ wrapped in red cloth. This year’s budget will be presented in a paperless form, continuing the trend from the last three years.
Here are the key numbers to watch for in pre-election Budget 2024-25:
Fiscal Deficit: The projected fiscal deficit for the ongoing fiscal year ending in March 2024 stands at 5.9 per cent, a decrease from the 6.4 per cent recorded in the previous fiscal year. All eyes are on the fiscal deficit figure for 2024-25, with widespread expectations that the government will loosen its fiscal stance in the upcoming election year.
While the anticipated fiscal deficit of 5.9 per cent of gross domestic product (GDP) for the current fiscal year is likely to be met, it remains nearly twice the Fiscal Responsibility and Budget Management Act (FRBMA) target of 3 per cent for the central government. Simultaneously, the debt-GDP ratio, currently at 54 per cent, significantly exceeds the targeted 40 per cent.
Disinvestment/Privatisation: In the current fiscal year the budgeted disinvestment target is likely to be missed, like the past five years. It is expected the government would set a realistic target of sub-Rs 50,000 crore for next fiscal.
Capital Expenditure: The government’s planned capital expenditure for this fiscal year is budgeted at Rs 10 lakh crore, higher than Rs 7.3 lakh crore in the last fiscal. The government has been pushing infrastructure creation and also incentivising states to step up capex.
Tax Revenue: The Budget had pegged direct and indirect tax mop-up at Rs 18.23 lakh crore and Rs 15.29 lakh crore for the current fiscal, taking the gross tax collection to Rs 33.61 lakh crore. The government’s tax revenues are expected to overshoot the budget estimates on buoyant collections in GST; and income and corporate tax.
Borrowing: The government’s gross borrowing budget was at Rs 15.43 lakh crore in the current financial year ending March 31. The government borrows from the market to fund its fiscal deficit. The borrowing number would be watched by the market, especially on the back of expected higher capital expenditures to boost growth and populist announcements.
Nominal GDP: India’s nominal GDP growth (real GDP plus inflation) in the current fiscal is estimated to be 11 per cent. The Budget is expected to give an outline on the nominal GDP growth numbers. Real GDP growth in the current fiscal is projected at 7.3 per cent and 7 per cent in the next.
(With PTI inputs)
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