Budget 2024: Continuity expected with emphasis on fiscal consolidation, sectoral benefits
fiscal deficit target to 5.0% for FY25 from 5.1% in the interim Budget thus reinforcing the inclination to stick to fiscal consolidation; ii) make higher transfers to states for capex spend iii) increase transfer under PM KISAN from Rs.6,000 p.a. to Rs.7,500 p.a. iv) provide incentive to income tax payers to shift to the new tax regime by providing higher standard and other deductions/higher exemption limit/changes in tax slabs.
Measures to bring down the interest rates in the system could trigger higher business activity, new capex announcements, reduce the interest outgo for businesses and expand valuation of stocks. For this, sticking to the fiscal consolidation path and desisting the tendency to turn populist will be appreciated. The government is likely to avoid being populist through handouts and could stick to the path of fiscal prudence although it may make extra efforts to win over a larger population of rural and urban poor by incurring targeted social welfare spending.
The Budget could bring benefits to several sectors, including affordable housing, Industrials/Engineering, Consumer goods etc. The NDA 3.0 has already announced the decision to help 3 crore additional rural and urban households for the construction of houses.
The Budget could see the government paving the way for foreign-domiciled Indian startups to flip their corporate headquarters back to India via the special economic zone of GIFT City with minimal tax implications and to woo other companies to the Gift city with tax-breaks and other
