12:30 PM:
Long term capital gains tax hiked from 10% to 12.5% in Union Budget. The Union Budget for 2024-25 has hiked the Long-term capital gains tax to 12.5 percent from 10 percent, while short-term capital gains tax is now 20 percent on all financial assets. Further, LTCG not taxable limit has been increased from Rs 1 lakh to Rs 1.25 lakh.
12.05 PM: Infra capex unchanged. Capex target unchanged at Rs 11.11 lakh crore, 3.4% of GDP . We will encourage states to support similar investments in infra, says FM. State capex loans at 1.5 lakh crore. Investments by private sector in infrastructure will be promoted.Despite RBI dividend bonanza Govt keeps capex unchanged at Rs 11.11 lakh crore .
11.45 AM: Government to set up integrated technology system for IBC for better ouctomes. IBC has dissolved more than 1000 companies , resulting in direct recovery of Rs33.3 lakh cr. Appropriate changes to IBC to be initiated , additional tribunals to be established. Out of thos, some will be notfied to operate exclusive under the companies act. 28000 cases disposed off priort o admission in NCLT.
11.40 AM: Budget announces new mechanism to facilitate bank credit to MSMEe during stress period. Mudra loans limit enhanced to Rs 20 lakh from Rs 10 lakh. SIDBI will expand its reach to MSME clusters to provide direct credit.
11. 40 AM: Modi 3.0 Budget announced support for AP and Bihar. Rs 26000 crore allocated for Bihar highways project. Government announces new airports, medical colleges , sports infratsurcture in Bihar. Additional support will be provided for capital expenditure. FM to facilitate Rs 15000 croresfor Andhra Pradesh for dveelopment.
11.35 AM: Government announces a scheme to give education loans for loans upto 10 lakh rupees for higher education in domestic institutions. E Vouchers of Rs 10 lakh loans to 1 lakh students for interest subvention of 3% of loan amount.
11.30 AM: Job creation in manufacturing will incentivise additional employment in manufacturing sector. A scheme to provide one month wages to all persons newly entering workforce in formal sector. Scheme expected to create mployment for additional 15 lakh persons. Women-focused entreprenuers will be encouraged. Model skill loans schemes to be revised backed by government guarantee.
11.25 AM: ,Mission for pulses and oil seeds–a stratgey for achieving self relaiance in oil seeds. Will promote farmer producer organisations, cooperative and startups. Will use digital public infrastructure in agriculture for coverage of farmers and their lands, digital crop survey will be carried out in 400 districts.
11.10 AM: FM lists out the measures announced for various segmehts announced in the interim Budget. Made a provision of Rs 2 lakh crores for 5 schemes. This Budget envisages sustained priorities for critical sectors, says FM. Budget also covers some of the previously made announcements. Productivity in agriculture: Government to undertake a comprehensive review. Funding to be provided for private sector for reserach.
11.00 AM: FM Sitharaman begins Budget speech saying the government is determined to make sure all Indians, regardless of their caste and gender make progress. India’s eceonomic growth continues to be shining exception. India’s inflation continues to be low and stable, moving to 4% target. FM focuses on employment skilling, MSMEs and middle class.
10:45 AM: Nirmala Sitharaman meets President ahead of Budget speech. Finance Minister Nirmala Sitharaman on Tuesday called on President Droupadi Murmu before presenting the full Budget for 2024-25. As per established tradition, the finance minister met the President at the Rashtrapati Bhavan before heading to Parliament. President Murmu offered ‘dahi-chini’ (curd-sugar), considered auspicious, to Sitharaman before she left for Parliament to present the Union Budget.
10:40 AM: Sitharaman again takes tablet in red pouch to present paperless Budget. Finance Minister Nirmala Sitharaman on Tuesday again took a digital tablet wrapped in a traditional ‘bahi-khata’ style pouch as she headed for Parliament to present the full Budget 2024-25 in a paperless format just like the previous years.
Draped in a white silk saree with magenta border, she posed for the traditional ‘briefcase’ picture outside her office, along with her team of officials, before heading to meet the President.
10:10 AM: Key numbers to watch in the Budget 2024
— Borrowing: The government’s gross borrowing Budget was Rs 14.13 lakh crore in the current financial year as per the Interim Budget. The government borrows from the market to fund its fiscal deficit. The borrowing number will be watched by the market, especially on the back of more-than-expected dividend from the RBI and financial institutions.
— GST: Goods and Services Tax (GST) collection in 2024-25 is estimated to rise to Rs 10.68 lakh crore, an increase of 11.6 per cent. The tax revenue figures will have to be watched out for in the final Budget for the 2024-25 fiscal year.
— Fiscal Deficit: The budgeted fiscal deficit, which is the difference between the government expenditure and income, for the current fiscal is 5.1 per cent as projected in the Interim Budget in February, against 5.8 per cent in the last fiscal year. The full Budget is expected to provide better-than-earlier projections as there has been tax buoyancy.
— Capital Expenditure: The government’s planned capital expenditure for this fiscal year is budgeted at Rs 11.1 lakh crore, higher than Rs 9.5 lakh crore in the last fiscal year. The government has been pushing infrastructure creation and also incentivising states to step up capex.
— Tax Revenue: The Interim Budget had pegged gross tax revenue at Rs 38.31 lakh crore for 2024-25, an 11.46 per cent growth over the last fiscal. This includes Rs 21.99 lakh crore estimated to come from direct taxes (personal income tax + corporate tax), and Rs 16.22 lakh crore from indirect taxes (customs + excise duty + GST).
— Nominal GDP: India’s nominal GDP growth (real GDP plus inflation) in the current fiscal year is estimated to be 10.5 per cent to Rs 327.7 trillion as per the Interim Budget. In view of expected normal monsoon, improvement in revenue collections and pick up in rural consumption, is expected that there could be upward revision in growth estimate. Real GDP growth in current fiscal is projected at 7.2 per cent, as per the RBI.
—Dividend: The interim Budget had projected Rs 1.02 lakh crore from RBI and financial institutions. This will be revised upwards as the RBI has already made surplus transfer of Rs 2.11 lakh crore earlier in May. At the same time, Rs 43,000 crore expected to be garnered from CPSEs.
9:45 AM: Nilaya Varma, Co-Founder and CEO at Primus Partners:
“It is after a very very long time, one has seen such high expectations from a budget. It is never easy to balance the needs and hopes of 1.4 billion people. However, we also have a FM who has the experience (7th year) to be able to deliver. Outside of how to boost short term consumption and tweaks to duties, one will be keen to see specific initiatives and spend on capital projects, encouragement to private investments, revival of manufacturing growth to absorb growing job demands coming out of farm sector and fiscal discipline to meet the goals of Viksit Bharat.”
9:15 AM: Stock markets have opened in green. The 50-share Nifty has opened up and is now trading 0.22% up at 24550 while Sensex is trading at 0.17% up at 80,626. Markets are on a wait and watch mode today to see what’s in store. Any announcement on tax increase for corpotrations may kill the mood while huge spending announcements on infra could act as a booster.
9:15 AM: What is in store for agriculture? Every year, the government increases the agricultural credit target to banks while announcing the Union Budget. Today too, the government is likely to increase the agricultural credit target to Rs 22-25 lakh crore for the next fiscal, as against the Rs20 lakh crore for fiscal year 2023-2024. But will this money translate into higher contribution from the sector to GDP? It’s doubtful. The share of agriculture GVA has been moderating. According to a research report by Citi, agriculture GVA growth has moderated in fiscal year 2023-2024 (to mid-single digit from low double digit through FY20-23).
9.00 AM: FM Nirmala Sitharaman has arrived at the Ministry of Finance for Budget presentation. Modi 3.0’s first major policy announcement, is expected to focus on job creation and boosting consumption, which analysts expect will be positive for sectors such consumer goods, real estate and automobiles. Of all this, unemployment is the elephant in the room.
8:30 AM: In February, the Interim Budget saw no major policy shifts, as expected. That may not be the case for the full Budget, Sitharaman faces the challenge of balancing growth and fiscal consolidation. It needs to put money in the hands of people to improve consumption. In a coalition set up, Modi government must also address the demands of key allies like N Chandrababu Naidu’s Telugu Desam Party (TDP) and Nitish Kumar’s Janata Dal (United). It’s a tough balancing act.
8:10 AM: Only a few hours to go before FM Nirmala Sitharaman presents her seventh consecutive Budget. Priort to this, the record is with Morarji Desai who presented the Union Budget for six times consecutively. Certainly a big milestone for Sitharaman!
A day ahead of the Budget, Economic Survey 2023-2024 projected the Gross domestic product (GDP) to grow at 6.5–7 percent in 2024-25, thus hinting a moderation in the pace of expansion amid potential risks from cheaper imports that could affect private investment.
“A note of caution is warranted here. Private capital formation after good growth in the last three years may turn slightly more cautious because of fears of cheaper imports from countries that have excess capacity,” the Survey said.
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On July 23, Union Finance Minister Nirmala Sitharaman will announce Union Budget 2024-2025 which will set the agenda for Narendra Modi 3.0, The Bugdet is set against Rs 2 lakh crores unexpected bonanza from RBI which can be used for capital expenditure or fiscal deficit management.
Following are some key pointers to watch out in the Budget:
Populist or prudential—This time, the coalition pressure will be evident. Major allies of BJP Nitish Kumar and Chandra Babu Naidu have already raised demands such as special status for Bihar and Andhra Pradesh.
Job creation—what can the budget do? The Commerce Ministry has set an ambitious yet achievable target of US$2 trillion in exports by 2030 with a focus on labour-intensive sectors such as textile, electronics, agriculture, and food processing.
Tax changes –What is expected of every budget – one would expect relief for the middle class in terms of raising the taxable income threshold and rationalisation of GST slabs. Indian corporations and foreign investors will expect further simplification of tax laws relating to tax deducted at source (TDS), capital gain, and angel tax, etc.
Banking Sector–Will the FM step on the reforms pedal by initiating the bank privatisation bid? The privatisation of IDBI Bank is already underway. There are rumors of a few other banks coming up next for government stake sale. Will there be action this time?
Some numbers:
Fiscal deficit:
The fiscal deficit target of 5.1% of GDP in FY25 set in the interim budget is on track to be met, positioning us to achieve 4.5% of GDP in FY26.
Inflation:
While core inflation has come down, food inflation remains elevated. With the expectations of a normal monsoon, prices of vegetables are expected to come down and hence cool off food inflation.
The RBI has set the FY 25 inflation target at 4.5%. India’s retail inflation rose to four-month high of 5.08 percent in June compared with 4.75 percent in the previous month as food inflation galloped to 9.4 percent given the impact of heatwave on vegetables.
Agriculture: Credit target for FY25 may be raised to Rs25 lakh crores.