New Delhi: Finance Minister Nirmala Sitharaman is presenting the Union Budget for fiscal 2024 which will set the foundation for taking India’s economic growth to the forecast rate of 6.8 per cent. The focus of this Budget is on “green growth, youth power, farmers and women,” she said in her opening remarks.
“This is the first Budget of Amrit Kaal,” Sitharaman said in her opening remarks, referring to the Modi government’s “New India” mantra. “The Indian economy is on the right track and heading towards a bright future. India’s global profile is rising due to world-class digital infrastructure and proactive role in frontier areas,” she said in her Budget 2023 speech.
“The Indian economy has grown from 10th to 5th largest in the world and per capita income has more than doubled. The G20 presidency gives us a unique opportunity to strengthen India’s role in the world economic order,” Sitharaman said.
Predictably, India’s middle class is looking for some form of income-tax relief. Though the tax slab wasn’t changed and no new deduction was announced last year, inflation has eaten into people’s earnings. They haven’t seen a change in tax rate since 2017-18 and in tax slab since July 2014.
Sitharaman may be able to afford a balanced, not a populist, Budget since the general election is still a year and one more Union Budget away. Still, with Prime Minister Narendra Modi’s BJP hoping to win a third consecutive term, massive welfare programmes for farmers and the rural population can’t be ruled out.
The Finance Ministry had been considering increasing the limit under 80C, which includes investment in life insurance, fixed deposit, bonds, housing and public provident fund. If this happens, it will encourage savings and help raise rainy-day funds for people whose savings were eroded at the height of the Covid-19 pandemic.
The Modi government may strengthen its “Make In India” and “Atmanirbhar Bharat” policies by giving financial benefits to manufacturers and suppliers who want to set up shop in the country.
The farm sector went through difficult times in 2022 due to global supply problems, unseasonal rains and floods, the effects of climate change and the war in Ukraine. Sitharaman would likely have something to cushion them from all these shocks. After all, farmers make for a large and influential voter base.