During the legislature’s budget session on February 1, 2024, Finance Minister Nirmala Sitharaman will present the Union Budget 2024 for the fiscal year 2024–2025. However, being an election year, the budget will likely serve as a temporary financial plan or a vote on account.
Key Expectations and Fiscal Priorities: In the upcoming budget, the primary objective is to achieve a delicate equilibrium between fostering economic growth and ensuring financial stability. This entails addressing various sectors’ needs while simultaneously consolidating the nation’s fiscal position.
A significant expectation revolves around maintaining a manageable fiscal deficit, with the Confederation of Indian Industry (CII) suggesting a target of 5.9% of GDP for the fiscal year 2024. Furthermore, there is a call for further reduction, aiming for approximately 5.4% of GDP in the fiscal year 2025. This indicates a concerted effort towards prudent fiscal management to sustain economic momentum while averting excessive debt accumulation.
Driving Fintech Innovation:
Advocating for Investment in Artificial Intelligence, Mobikwik’s CEO, Bipin Preet Singh, urges government support to overcome linguistic barriers and enhance fintech accessibility. Proposals include standardized interfaces for financial apps integrating AI and establishing a national AI development mission to lessen reliance on foreign expertise.
Focus on Financial Inclusion:
Gaurav Jalan, CEO of mPokket, advocates for prioritizing financial empowerment and innovative lending solutions for MSMEs and youth in the fintech industry to drive business growth and technological progress.
Industry Focus:
Apurva Sheth from SAMCO Securities predicts that the government will likely prioritize sectors like infrastructure, railways, and defense in the forthcoming interim budget for 2024–2025.
Support for Agriculture, Infrastructure, and Healthcare:
Sonam Srivastava of Wright Research expects an emphasis on fiscal discipline and enhanced funding for agriculture, healthcare, and infrastructure in the upcoming budget. This strategy aims to bolster investor confidence and foster a positive economic outlook.
Increase in Capital Expenditure:
Contrary to the customary trend of modest budgets preceding elections, the government plans to elevate capital expenditures, targeting a fiscal deficit of 4.6% for FY 2024–2025. Axis Securities forecasts a 10% to 15% surge in government investment in the BFSI sector, particularly focusing on public infrastructure enhancements.
Augmentation in Textile Ministry Allocation:
A marginal 2.5% augmentation in the budget allocation for the textile ministry is anticipated for FY 2024–2025. The current allocation for the ongoing fiscal year stands at ₹4,389 crore, suggesting a slight upward adjustment.
