Budget 2024 highlights: We are aiming for a fiscal deficit target of 5.1% for FY25, says FM Sitharaman

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The business community has responded positively to the interim budget presented by Finance Minister Nirmala Sitharaman on Thursday, February 1, 2024. Key industrialists have expressed satisfaction with the government’s approach towards fiscal discipline and inclusive growth. Read more here

In the highly anticipated interim Budget for 2024, Finance Minister Nirmala Sitharaman made no adjustments to the insurance sector, leaving many industry experts and stakeholders with mixed reactions.

The insurance sector had been advocating for an extension of the ₹50,000 tax exemption for the National Pension Scheme (NPS) to include pension and annuity plans. However, these expectations were not met in the interim Budget.  Read more here

The government has set aside ₹15,500 crore for various programmes in the coming fiscal year. This includes a focus on semiconductors and the Production-Linked Incentive (PLI) scheme for mobile and IT hardware.

A significant chunk of ₹4,203 crore has been earmarked for incentives for assembly, test, and packaging plants. This is expected to benefit projects by companies like Micron, Foxconn-HCL joint venture, and Tata Group. Read more here

In a post-budget interview with CNBC-TV18, Revenue Secretary Sanjay Malhotra shed light on the remarkable surge in revenues following the implementation of a 28% Goods and Services Tax (GST) on online gaming. The Finance Minister, Nirmala Sitharaman, presented the interim Budget on Thursday, February 1.

Malhotra said since the introduction of the 28% GST on online gaming on October 1, 2023, the government has seen a sixfold increase in revenue. Read more here

Moody’s Investors Service said on Thursday that India’s interim budget has indicated a continued narrowing of the fiscal deficit after the COVID-19 pandemic. However, it is important to note that before the pandemic, India’s fiscal deficit was below 5%.

Moody’s last August had affirmed a ‘Baa3’ rating on India with a stable outlook. A higher rating implies lower economic risk, allowing a country to borrow at cheaper rates.

Moody’s also noted that while most countries have not defaulted, a lack of default history is not a marker of a high credit rating. The agency also said that it believes it has given credit to India for progress in fiscal deficit consolidation. Read more here

“The Interim Budget 2024 is extremely well thought of and clearly a step towards the vision of Developed India @ 2047. The FM has stayed away from populist measures in an election year and needs to be congratulated for the same.

By limiting the deficit to 5.1% of the GDP which should be achievable given the rather conservative tax receipts, fiscal prudence has been given the due importance. Lower borrowings and thus lower borrowing costs will help prioritize domestic spends and guard against external shocks.

The increased capital expenditure of ₹11.11 lakh crore, constituting 3.4% of the GDP, bodes well for the infrastructure led GDP growth and will also crowd in the private sector investments as we are now witnessing improvements in consumer sentiments (and demand),” said Anil G Verma, Executive Director and CEO, Godrej & Boyce.

In the interim budget presented on Thursday, Finance Minister Nirmala Sitharaman has allocated ₹900 crore for the nation’s ambitious Khelo India programme.

The Khelo India is a Central government scheme aimed at bolstering sports culture at the grassroots level across India. The National Programme for Development of Sports, popularly known as Khelo India, was launched in 2018 by then Union Sports Minister Col. Rajyavardhan Singh Rathore. Read more here

“The 2024 interim budget’s increased capital expenditure for infrastructure development is a strategic and commendable move. It promises to accelerate economic growth and positively impact the logistics sector. The emphasis on expanding air connectivity, along with the development of existing airports and the establishment of new ones, is a pivotal step that aligns with our advocacy for efficient multimodal logistics.

FedEx welcomes the forward-looking approach of the 2024 interim budget, reflective of the ‘Viksit Bharat’ vision. We remain committed to actively contributing to India’s growth journey, aligning our efforts with the government’s vision for a smarter and more sustainable logistics infrastructure in India,” said Kami Viswanathan, President – MEISA, FedEx Express.

Union Finance Minister Nirmala Sitharaman highlighted India’s robust economic performance, boasting three consecutive years of 7% growth, solidifying its status as the fastest-growing economy in the G20.

Emphasising the significance of the interim Budget presented ahead of the elections, Sitharaman articulated the essence of GDP as Governance, Development, and Performance. “It is an interim budget presented before just the elections. GDP- Governance, development and performance,” she said addressing a presser after presenting the budget.  Read more here

“The 2024 Interim Budget is a decisive step towards India’s economic sustainability, in line with the ‘Viksit Bharat by 2047’ vision. The fiscal responsibility reflected in the 5.8% GDP fiscal deficit is commendable.

The ‘First Develop India’ focus promotes FDI, aligning with our global collaboration goals. I anticipate progressive policies supporting fintech, digital lending, and digital skills,” said Abhay Bhutada, managing director of Poonawalla Fincorp.

DIPAM Secretary Tuhin Kanta Pandey stressed the need to look at disinvestments in a holistic way, including dividends, while also highlighting that the combined market capitalisation of all central public sector enterprises (CPSEs) today is ₹58 lakh crore.

Pandey highlighted that 61 listed CPSEs, 16 public sector enterprises (PSBs) and public sector insurance (PSI) firms have risen by over ₹42 lakh crore in three years, rising from ₹15 lakh crore at the start of 2021. Read more here

“In the words of Mahatma Gandhi, “the true measure of any society can be found in how it treats its most vulnerable”. And Government by its focus on “GYAN” – Gareeb (Poor), Youth, Annadata (Farmers) and Naari (Women) has targeted to achieve exactly that.

The budget gets full marks for Credibility of numbers, Continuity on structural reforms and Conviction of building a developed economy in a highly sustainable and equitable manner. The conviction is commendable despite a challenging global backdrop.

The focus has shifted on quality rather than quantity of spending, on outcome rather than outlays. There is an unwavering focus on building world-class infrastructure – physical, digital as well as social. Social welfare received targeted attention for enhanced quality outcomes. A distinct highlight was the creation of an Innovation fund to foster a self-reliant, knowledge-based economy,” said Navneet Munot, MD and CEO, of HDFC AMC.

Finance Minister Nirmala Sitharaman has allocated ₹ 177.24 crore for Pradhan Mantri Shram Yogi Maandhan (PM-SYM) in the interim budget, which was presented on Thursday.

This is a voluntary pension scheme initiated for unorganised sector workers. Launched in 2019, the scheme aims to provide old-age protection. Read more here

“The budget is distinctly positive for fixed income market. The budget continued its push on public capex while balancing fiscal responsibility. The fiscal deficit target of 5.1% for FY25 was below all consensus estimates & the most positive aspect was gross borrowing number of 14.1 trillion well below market estimates of 15-15.2 trillion,” said Anurag Mittal, Head of Fixed Income at UTI AMC.

Chief Economic Adviser (CEA) V. Anantha Nageswaran on Thursday said the overall tax revenues are poised to grow at 12.5% in the current financial year. This growth is underscored by a tax buoyancy of 1.1%, highlighting the resilience of the economy, he said in a post-budget interview with CNBC-TV18. An essential highlight from the interview was the absence of tax rate increases in both the current and preceding fiscal years. Read more here

“We welcome the positive steps announced in the Interim Budget 2024, particularly the continued focus on affordable housing initiatives like Pradhan Mantri Awas Yojana (PMAY) scheme to assist middle-class families to own homes. The increased allocation for infrastructure development will also create a positive effect, which would boost the demand for housing.

We are particularly encouraged by the commitment to empower women homeowners, with higher percentage of houses assigned to them under the PMAY-Grameen Scheme. We believe these initiatives will further strengthen our Prime Minister’s vision of ‘Housing for All’ and contribute to Inclusive and Sustainable growth,” Sarosh Amaria, managing director of Tata Capital Housing Finance, said.

“The budget’s focus towards four major pillars – youth, poor, women and farmers will collectively work towards the vision of a Developed India by 2047. I commend the government’s steadfast commitment to fiscal consolidation, aiming for a 4.5% fiscal deficit in 2025-26. Recognizing the significant transformation in the Indian economy over the past decade and highlighting structural reforms underscores a positive trajectory for economic resilience,” said Rajeev Sabharwal, MD and CEO of Tata Capital.

Abhimanyu Munjal, joint MD and CEO of Hero FinCorp, said, “We commend the strategic initiatives outlined in this interim budget that offers hope for the middle class and those aspiring to own homes, especially in rented or slum areas.

With significant funding and extended interest-free loans for businesses, it fuels growth and innovation. Increased support for small businesses through the Pradhan Mantri Mudra Yojana expands assistance, aiming to improve the overall quality of life for all”

“The interim budget focuses on boosting holistic economic growth. Allocating ₹1 lakh crore for interest-free loans emphasize the government’s commitment to strengthening innovation and research. Additionally, highlighting the role of digital public infrastructure shows a push towards formalizing the economy. These measures support the organized financial services sector, enhancing lending, investments, and savings efficiency.”

In the Interim Budget, the allocation for the Agriculture Ministry for 2024–25 has been set at ₹1.27 lakh crore, exhibiting an increase from the revised estimates of ₹1.16 lakh crore in 2023–24 and the budget estimates of ₹1.15 lakh crore for the same period.

The Budget underscores a commitment to intensify initiatives focused on value addition in the agricultural sector, enhancing the role of women and increasing farmers’ incomes.

Read more here

A year after the Union Budget 2023 cut allocation to Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) to the lowest in four years, Union Finance Minister Nirmala Sitharaman has increased it this time to ₹86,000 crore in her Budget Estimate (BE) for 2024-25.

Apart from raising the MGNREGA allocation from ₹60,000 crore in the previous Budget estimate, FM Sitharaman also gave a report card for the current fiscal 2023-24. She pointed out that structural reforms were undertaken, and pro-people programmes were formulated and implemented. “Conditions were created for more opportunities for employment and entrepreneurship,” she said in her interim Budget 2024 presentation.

Read more here

Chandra Shekhar Ghosh, MD and CEO, Bandhan Bank said, “The interim budget focuses extensively on inclusive development and is a step forward in the $5 trillion economy aspirations of the nation. The focus on the housing sector will benefit a range of peripheral sectors like cements, paints and steel, among others, and create employment opportunities.”

“The focus on women empowerment will further boost the economy. The emphasis on infrastructure and rural development will lay a strong foundation for India’s growth story,” Ghosh added.

Punit Goenka, MD and CEO, Zee Entertainment Enterprises Ltd said, “The government’s efforts to boost India’s economy through structured policy reforms will accelerate the development of our nation over the next few years. The steps taken by the Hon’ble Finance Minister to empower the youth by fueling the entrepreneurial spirit and fostering innovation in technology through initiatives like the 1 lakh crore research corpus, creates a golden era for sunrise sectors such as media & entertainment.”

“The combination of youth and technology certainly holds immense potential and can lead to exciting new opportunities for content distribution and monetization, boosting the growth of the M&E sector at large,” Goenka added.

Talking about the budget, Dr Pawan Munjal, Executive Chairman, Hero MotoCorp said, “The emphasis on ‘Garib Kalyan, Nari Shakti, Yuva (youth empowerment), and Annadata (empowerment of farmers)’ by prioritising their needs and aspirations reflects a commitment to the holistic development of all, aligning with the government’s vision of “Sabka Saath Sabka Vikas”. Upholding fiscal discipline has consistently been the hallmark of this government, and this Budget reaffirms that commitment. Through these measures, the interim Budget takes a decisive stride towards realising the vision of making India ‘Viksit Bharat’ by 1947 – the centennial year of our independence.”

On the India-Middle East-Europe Economic Corridor, Union Finance Minister Nirmala Sitharaman says, “Well, it’s been announced and we are taking it forward. Yes, there is a significant disturbance in the Red Sea area and the Middle East. But this is a project which has long-term implications for the entire region, region up to Europe, because it also includes Europe. So, yes, we will be taking this project forward. We will be consulting and taking it in all its contours.” 

(ANI)

“This year’s budget, in my view, has been drafted to fortify our strengths and ensure that the hard-won momentum remains, with only the most necessary interventions,” Arun Awasthy said.

He stated the Interim Budget as stable and focused.

“The verdict is resounding – the Indian Economy has emerged strong, especially after the pandemic, and all signs point towards a continued steady momentum in the future. The Indian economy is expected to move in a continued steady momentum,” he added.

Christian de Guzman, Senior Vice President, Moody’s Investors Service, said, “The interim budget for 2024-25 firmly conveys the government’s commitment to its fiscal consolidation goals, set against a backdrop of healthy economic growth. Although political considerations likely influenced the lack of significant tax measures, the government demonstrated fiscal restraint in not resorting to large handouts or increasing discretionary spending ahead of this year’s elections. Consequently, the government anticipates that reduced spending as a percentage of GDP will largely drive the reduction in the fiscal deficit, despite ongoing increases in planned infrastructure spending. Given the challenging global environment and the potential for climate-related shocks, emerging spending needs not currently included in the budget could restrict the government’s ability to meet its deficit target. Furthermore, the envisaged fiscal consolidation will not alleviate pressures on debt affordability amidst high current interest rates, as the budget projects debt servicing costs to account for an increasingly large portion of revenue. We expect the final budget, to be released after the elections, to provide more definitive indications of India’s fiscal consolidation trajectory over the medium term.”

In the interim budget for the fiscal year 2024-25, the Jal Shakti Ministry has been granted a total allocation of ₹98,418 crore, marking an increase from the previous budget of ₹96,549 crore.

The flagship program of the ministry, the Jal Jeevan Mission, has secured a significant portion, receiving 71% of the total allocation.

Specifically, the Department of Drinking Water and Sanitation (DoDWS) within the ministry has been allotted ₹77,390 crore, demonstrating a marginal increase of 0.4% compared to the previous fiscal year.

Read more here

Finance Minister Nirmala Sitharaman on Thursday, February 1, announced a marginal increase in the allocation to the state-owned National Highways Authority of India (NHAI). The budget for 2024-25 sees a marginal uptick, reaching ₹1.68 lakh crore, compared to the revised allocation of ₹1.67 lakh crore in the previous year.

Read more here

Union Finance Minister Nirmala Sitharaman says, “There will be a white paper on the economic performance of the last 10 years compared with the previous 10 years…Govt has got the trust, confidence and blessings of the people based on its exemplary track record of GDP that is Governance, development and performance…”