Union Finance Minister Nirmala Sitharaman is set to unveil her seventh Union Budget for the fiscal year 2024-2025, a significant event that will influence the economic trajectory of the nation. The Budget is expected to introduce measures that will impact various aspects of daily life, potentially making several items either costlier or cheaper for consumers.
Economic Landscape and Consumer Goods
As the first budget of the BJP-led NDA government, it is anticipated to shape India’s economic framework, with implications for infrastructure development and social welfare programs. Among the expected announcements are reductions in prices of mobile phones and compressed natural gas, along with measures to make housing more affordable.
In the 2023 Budget, Sitharaman had announced reductions in import taxes on components such as camera lenses to promote domestic mobile phone manufacturing. This move was part of a broader strategy to bolster India’s electronics sector. Additionally, the tax rate on lithium-ion batteries, crucial for both phones and electric vehicles, was cut to facilitate cheaper manufacturing within the country.
Economic Survey Insights
The Economic Survey 2024, presented by Sitharaman on July 22, 2024, offers an optimistic outlook with India’s GDP projected to grow between 6.5-7% this year. The survey also noted a decline in retail inflation to 5.4% during 2023-24, down from 6.7% in the previous fiscal year. The survey highlighted key themes such as ‘Service’ and ‘Growth,’ underscoring the government’s focus on these areas.
Expectations and Reforms
Continuing the trend from previous years, the 2024 Budget will be delivered in a paperless format. The Interim Union Budget 2024, presented earlier on February 1, was a precursor to this comprehensive budget, set against the backdrop of upcoming general elections.
The middle class has high hopes for tax relaxations, anticipating increases in the standard deduction limit and basic tax exemption limit under the new income tax regime. There is also a call for a simplified capital gains tax regime. Additionally, taxpayers expect rationalization of income tax slabs, an increased Section 80C deduction limit, and enhanced tax benefits for home buyers and investors.
