Nirmala Sitharaman, the Finance Minister, unveiled the Budget 2024, which includes a number of transformative initiatives that are designed to stimulate economic growth and development. Key highlights and market reactions are summarized below.
Significant Information
Loan Limits for Mudra: In order to assist entrepreneurs and small enterprises, the loan limits for Mudra have been increased from ₹10 lakh to ₹20 lakh.
In collaboration with state and private sector partnerships, the government intends to establish 100 industrial campuses that are investment-ready.
Urban housing: In order to meet the increasing demand for housing in urban areas, a substantial allocation of ₹10 trillion has been allocated for urban housing.
Technology Infrastructure: The Insolvency and Bankruptcy Code (IBC) is anticipating the implementation of a new integrated technology infrastructure that will improve its results.
The market response
Significant volatility was observed in the Indian equity market on the day of the announcement. As of 12:04 PM, the BSE Sensex was trading at 80,340.45, or a decline of 161.63 points or 0.20%. The NSE Nifty50, which was trading at 24,457.80, was also down 51.45 points or 0.21%.
Perspectives of Analysts on Budget Proposals for 2024
Agriculture: The budget’s emphasis on the promotion of natural farming, the expansion of digital public infrastructure, and the distribution of climate-resistant seed varieties was emphasized by Anand Ramanathan, Partner and Consumer Products and Retail Sector Leader at Deloitte India. All of these initiatives are anticipated to increase productivity at the farm level. In order to accommodate changing consumption patterns, the budget also prioritizes vegetable production clusters and promotes self-sufficiency in crustacean and legume production.
The budget’s robust provisions for employment and skilling were highlighted by Sahil Gupta, a Partner at Deloitte India. To enhance the gross enrollment ratio in education and provide youth with industry-relevant skills for a productive future workforce, funds are allocated for education and skilling loans.
E-Commerce: The Direct-to-Consumer (D2C) ecosystem is anticipated to substantially benefit from the budget’s emphasis on e-commerce centers. In addition to increasing exports, these centers will improve the operational efficiency and market accessibility of small vendors and aggregators.
2024 Budget: Reality vs. Expectations
Fiscal and Economic Objectives:
Target for fiscal deficit in FY25 is 5.1%, with a revised target of 5.8% for FY24.
2024-25 tax receipts are anticipated to reach ₹26.02 lakh crore.
₹11.11 lakh crore is the capital expenditure allocation.
₹14.13 lakh crore is the gross market borrowing target for FY25.
The target for divestment is ₹50,000 crore.
Predicted nominal GDP growth is 10.5%.
Sectoral Allocations:
Rail: ₹2.55 lakh crore, a 5% increase from the preceding year’s ₹2.4 lakh crore.
Production-Linked Incentive (PLI) Scheme: ₹6,200 crore.
Sector of Health: ₹90,170 crore, representing a 13.8% increase from the previous year.
Budget for Education: ₹1.25 lakh crore for 2024-25.
Imposition of taxes:
A baseline exemption limit of ₹3 lakh is maintained under the new tax regime, while the previous regime’s exemption limit of ₹2.5 lakh remains unchanged.
No modifications to the deduction limits under Section 80C or the interest deductions for housing loans.
Initiatives for Housing:
An increased allocation of ₹80,671 crore for the Pradhan Mantri Awas Yojana (PMAY) in 2024-25 is proposed in the budget to assist middle-income groups in the purchase or construction of dwellings. The initiative is designed to increase demand in the real estate sector by constructing an additional 2 crore dwellings over the next five years.
Health Care Enhancements:
₹7,200 crore has been allocated for the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY).
₹646 crore has been allocated for the Ayushman Bharat Health Infrastructure Mission (PM-ABHIM). In addition to enhancing healthcare infrastructure, these funds will also offer comprehensive health coverage on a national scale.
Solar energy and access to free electricity:
A rooftop solar program was suggested by the Finance Minister, with the potential to save ₹15,000-18,000 per household annually by providing free electricity to up to 300 units per month to 1 crore households. This initiative supports India’s objective of producing 500 GW of renewable energy by 2030, thereby reducing dependence on fossil fuels and addressing climate change.
