New Delhi: Finance Minister Nirmala Sitharaman is gearing up to present the pre-election Budget, outlining the achievements of the Modi government over the past decade and offering insights into future plans to transform India into a developed nation by 2047. All eyes are on whether Sitharaman will prioritize populist measures, leaving more money in the pockets of ordinary citizens, or focus on pushing forward with reforms by adhering to a fiscal strategy aimed at reducing the fiscal deficit to 4.5 percent of GDP by 2025-26.
Sitharaman, set to deliver her sixth consecutive budget, made headlines in 2019 by replacing the traditional leather briefcase with a traditional 'bahi-khata' wrapped in red cloth. This year's budget will be presented in a paperless format, continuing the trend from the last three years.
Here are the key figures to keep an eye on in the pre-election Budget for 2024-25:
Fiscal Deficit: The projected fiscal deficit for the current fiscal year ending March 2024 stands at 5.9 percent, down from 6.4 percent in the previous fiscal. The focus will be on the projected deficit for 2024-25, with expectations that the government may loosen its purse strings in an election year.
Disinvestment/Privatization: The government's target for disinvestment in the current fiscal year is expected to be missed, continuing a trend from the past five years. It is anticipated that a realistic target of less than Rs 50,000 crore will be set for the next fiscal year.
Capital Expenditure: Planned capital expenditure for the current fiscal year is set at Rs 10 lakh crore, up from Rs 7.3 lakh crore in the previous fiscal. The government has been emphasizing infrastructure development and encouraging states to increase capital expenditure.
Tax Revenue: The Budget forecasted direct and indirect tax collections at Rs 18.23 lakh crore and Rs 15.29 lakh crore respectively for the current fiscal year, totaling Rs 33.61 lakh crore in gross tax collection. Tax revenues are expected to surpass estimates due to robust GST, income, and corporate tax collections.
Borrowing: Gross borrowing for the current fiscal year ending March 31 was set at Rs 15.43 lakh crore. The borrowing figure will be closely monitored by the market, especially considering the anticipated increase in capital expenditures to stimulate growth and potential populist announcements.
Nominal GDP: India's nominal GDP growth (real GDP plus inflation) for the current fiscal year is estimated at 11 percent. The Budget is expected to provide insights into nominal GDP growth projections. Real GDP growth is projected at 7.3 percent for the current fiscal year and 7 percent for the next.
Focus will also be on spending on key schemes like NREGA, as well as critical sectors such as health and education.
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