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June 17, 2024

Union Budget 2024: Key Expectations and Historical Milestone

Finance Minister Nirmala Sitharaman is set to commence the pre-budget consultations with industry stakeholders on June 20, ahead of presenting the Union Budget for the financial year 2024-25 in Parliament on July 22. According to a report by Mint, this consultation will follow an official meeting with the Revenue Secretary scheduled for the preceding Tuesday.

Economic Strategy and Goals

The upcoming budget will reveal the economic strategy of the Modi 3.0 government, focusing on accelerating reforms to propel India towards a $5-trillion economy and achieving the vision of “Viksit Bharat” by 2047. The Reserve Bank of India (RBI) projects a robust 7.2 percent growth for the Indian economy in FY25, reflecting the fiscal prudence maintained by the government. This positive outlook is further supported by the RBI’s announcement of a record ₹2.11 trillion dividend for FY24.

Key Policy Priorities

The Union Budget 2024 is expected to address several critical issues:

  1. Food Inflation and Agricultural Stress: Measures to control food inflation and alleviate agricultural stress will be pivotal. This may include raising the minimum support price (MSP) or providing price guarantees and lifting export bans on key agricultural products such as onions, wheat, and sugar.
  2. Unemployment and Job Creation: With a pressing need for youth employment, the budget is anticipated to support job creation through substantial government capital expenditure and increased funding for micro, small, and medium enterprises (MSMEs) and startups.
  3. Production-Linked Incentive (PLI) Schemes: The expansion of PLI schemes to more labor-intensive sectors is expected to boost private investment and foster economic growth.
  4. Capital Expenditure Momentum: Maintaining and enhancing capital expenditure will be crucial to sustaining economic development and infrastructure improvements.

Agricultural Sector Support

Given the challenges faced by the agricultural sector, including potential declines in productivity due to heat waves in the north, government intervention will be essential. However, improved monsoon forecasts for FY25 offer hope for a reversal of fortunes, with better weather conditions expected to enhance agricultural productivity.

Historical Milestone

Nirmala Sitharaman is poised to make history by becoming the first finance minister in India to present seven consecutive Union Budgets, surpassing Morarji Desai’s record of six. Desai, who served as finance minister from 1959 to 1964, presented a total of ten budgets, a record that has stood for over five decades. Sitharaman’s achievement marks a significant milestone in India’s financial history.

What to Expect

As we approach the Union Budget 2024, stakeholders and analysts are keenly observing the government’s approach to tackling immediate economic challenges while laying the groundwork for long-term growth. Key areas of focus will likely include:

  • Enhancing support for MSMEs and startups
  • Expanding PLI schemes
  • Addressing food inflation and agricultural productivity
  • Boosting job creation and youth employment
  • Maintaining capital expenditure momentum

The pre-budget meeting on June 20 will provide further insights into the priorities and strategies that will shape the Union Budget 2024. As the Modi 3.0 government gears up for its third term, the economic policies outlined in this budget will be critical in steering India towards its ambitious growth targets and long-term vision of becoming a developed nation by 2047.

Read more latest news on R9 News

Jhumpa Lahiri

Jhumpa Lahiri

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