Union Budget 2024-25 Overview: Nirmala Sitharaman’s Focus on Economic Growth

On February 1, 2024, as part of the legislature’s budget session, Finance Minister Nirmala Sitharaman will deliver the Union Budget 2024 for the fiscal year 2024–2025. However, due to it being an election year, the budget presented will be a temporary financial plan or a vote on account.

Key Expectations and Fiscal Priorities

The budget aims to strike a balance between economic development and financial consolidation. The fiscal deficit target for FY24 is 5.9% of GDP, as suggested by CII, with a further reduction to about 5.4% of GDP for FY25.

Investment in Artificial Intelligence

Mobikwik’s CEO, Bipin Preet Singh, advocates for government funding in artificial intelligence (AI) to overcome linguistic barriers and enhance accessibility for fintech companies. Standardized interfaces for financial apps with AI capabilities and the creation of a national AI development mission are proposed to reduce dependence on foreign expertise.

Emphasis on Financial Inclusion

Gaurav Jalan, CEO of mPokket, urges the budget to prioritize financial empowerment and innovative lending options for MSMEs and the youth in the fintech sector, fostering business expansion and technological advancements.

Sectoral Focus

According to Apurva Sheth of SAMCO Securities, the government is likely to prioritize sectors such as infrastructure, railroads, and defense in the upcoming interim budget for 2024–2025.

Support for Agriculture, Infrastructure, and Healthcare

Sonam Srivastava from Wright Research anticipates a focus on fiscal restraint and increased funding for agriculture, healthcare, and development in the forthcoming budget. This approach is expected to boost investor confidence and create a positive outlook.

Capital Expenditure Increase Plan

Despite the typical trend of smaller budgets before elections, the government aims to raise capital expenditures, targeting a 4.6% fiscal deficit for FY 2024–2025. Axis Securities predicts a 10% to 15% expansion in government investment in the BFSI sector, with a focus on public infrastructure.

Textile Ministry Allocation Increase

A modest 2.5% increase in the budgetary allocation for the textile ministry in FY 2024–2025 is expected. The current allocation for this fiscal year stands at ₹4,389 crore, indicating a slight upward adjustment.

 

Piyush Shukla

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