Union Budget 2024-25

Understanding the Union Budget

The Union Budget of India is the comprehensive financial plan of the government for the fiscal year, outlining its revenue and expenditure projections. Presented annually by the Finance Minister in Parliament, it serves as a blueprint for the country's economic policies and priorities. Beyond financial allocations, the budget addresses key aspects such as taxation, borrowing, and expenditure management, shaping the socio-economic landscape of India. It reflects the government's strategies to stimulate growth, promote development, and address fiscal challenges while aiming to achieve sustainable economic progress. As a critical policy document, the Union Budget influences sectors ranging from agriculture and infrastructure to healthcare and education, impacting the lives of millions across the nation.

Budget 2024-25

The Union Budget 2024-25 is set to be an important event for India, scheduled for presentation on July 23, 2024, by Finance Minister Nirmala Sitharaman. As the first budget of the re-elected government's new term, it carries significant weight and anticipation among various stakeholders, including investors, economists, and the general public.

Why is this Budget Special?

This budget is the first financial plan of the re-elected government's new term. There is great anticipation about the government's fiscal policies and economic strategies.

Post-election, the political scenario emphasizes the importance of addressing both regional aspirations and national priorities, ensuring a balanced approach to governance and development.

Economic Context and Expectations

Economic indicators, including robust GST collections and substantial dividends from the Reserve Bank of India (RBI), are expected to strengthen the budgetary framework. These factors provide a solid foundation for improving fiscal health and implementing growth-oriented policies.

In the last ten years, each budget has shown how the government aims to double farmers' incomes and increase money flow directly to them. Budgets have set aside more funds for agriculture, focusing on rural development and improving farming methods.

Initial indications suggest that in FY25, the government will continue focusing on consolidating finances to boost economic growth and control inflation. Meeting the fiscal deficit goal of 4.5% of GDP by FY26 is crucial, requiring careful allocation of resources to sectors such as Minimum Support Price (MSP), food, fertilizers, and LPG subsidies.

Key Focus Areas

Union Budget 2024-25 is expected to align closely with the Modi government's inclusive development agenda, prioritizing initiatives such as:

• Ujjwala Scheme: Ensuring clean cooking fuel access for rural households.
• Jal Jivan Mission: Facilitating water supply and sanitation in rural areas.
• PM Kisan: Providing income support to small and marginal farmers.
• Swachh Bharat Abhiyan: Promoting cleanliness and sanitation nationwide.

The railway sector is set to receive increased funding for capital projects, continuing the government's efforts to rejuvenate infrastructure. In the Interim Budget 2024, the railway ministry secured unprecedented financial support, highlighting the government's dedication to improving railway infrastructure.

Impact on the Stock Market and Sectors

Expectations of a favorable budget, without negative tax changes, are likely to maintain a positive trend in the stock market. Sectors like FMCG, infrastructure, renewable energy, housing, and railways, which stand to gain from rural sector improvements, are anticipated to see favorable market responses after the budget is announced.

Conclusion

As we await Finance Minister Nirmala Sitharaman's budget speech on July 23, 2024, expectations are focused on the Union Budget reinforcing the core policies of the re-elected government, while steering clear of significant long-term expenses. Robust revenue streams from GST and RBI dividends are set to enhance fiscal flexibility, facilitating targeted investments in rural infrastructure and agriculture. The budget aims to prioritize inclusive growth and revive sectors, though it is not anticipated to introduce major reforms or extensive expenditures in this fiscal cycle. All eyes are on how the government addresses economic challenges and charts a path towards sustainable development and prosperity in India.