Sitharaman presents Modi 3.0's first budget: What to expect?
Finance Minister Nirmala Sitharaman began presenting the Union Budget 2024 in the Lok Sabha on Tuesday. This is the first full budget of the new National Democratic Alliance government and is likely to focus on income tax reforms and enhancing the ease of doing business in India. This also marks Sitharaman's seventh presentation of a Union Budget—making her the first finance minister to present seven consecutive budgets. Here's what to look out for in this year's budget.
Tax incentives likely for manufacturing facilities
The finance minister is expected to introduce tax incentives for new manufacturing facilities and promote local procurement to boost job creation. Notably, the lack of job opportunities was a significant factor in Prime Minister Narendra Modi's Bharatiya Janata Party not securing a majority independently in the general elections. In 2024, the BJP formed a government with the support of its allies.
Anticipation over tax relief for middle class
The most eagerly awaited aspect of Sitharaman's budget speech is whether she will announce tax relief for the middle class. A key expectation is an increase in the exemption limit under the new tax regime. Currently set at ₹3 lakh, this limit means income up to this amount is not taxed. Many anticipate it will be raised to ₹5 lakh, offering significant relief to taxpayers and potentially making the new tax regime more appealing.
Infrastructure development in focus
The Modi government has prioritized infrastructure development, with planned capital expenditure (capex) set at ₹11.1 lakh crore, up from ₹9.5 lakh crore in the previous fiscal year. Sitharaman has indicated plans to bolster micro, small and medium enterprises (MSMEs), particularly in the defense, electronics, and electric vehicle (EV) manufacturing sectors. This aligns with the government's "Make In India" initiative.
Union Budget to be passed on July 30
The Union Budget 2024 is expected to be passed on July 30. According to reports, opposition leaders plan to challenge the government on issues such as price rise, unemployment, lack of growth in key sectors, and agrarian distress. On Monday, Sitharaman presented the Economic Survey which said that India's real gross domestic product (GDP) grew by 8.2% in financial year 2024, exceeding 8% mark in three out of four quarters of FY24.
