Interim Budget Live Updates: India Inc gives thumbs up to FM Nirmala Sitharaman's Budget

BC Bhartia and Praveen Khandelwal, National President and Secretary General of the Confederation of All India Traders (CAIT), respectively, have expressed their approval of the interim budget. They pointed out that the record-high capital expenditure of 11.1 lakh crore will bring significant benefits to the country's markets, particularly favoring traders. The duo underscored the positive impact on trade operations through the establishment of logistics corridors and enhanced railway cargo handling, which will contribute to the growth of businesses nationwide.

Bhartia and Khandelwal emphasized that the substantial allocation of 11.1 lakh crore will drive various projects, generating increased business opportunities and a notable upswing in employment on a large scale. They conveyed optimism about this expenditure accelerating development, fostering growth in both production and services, thereby making a substantial contribution to the overall progress of the nation.

The CAIT leaders further elaborated that these funds will fuel extensive construction activities, paving the way for the development of new foundational facilities across various sectors. This investment in infrastructure is anticipated to fortify the foundation, leading to improved business conditions and an enhanced production capacity.

Reflecting on the Interim Budget from the perspective of a startup accelerator founder, PedalStart Co-Founder Manas Pal sees it as a positive acknowledgement of the entrepreneurial spirit driving India's growth. While maintaining stability with no significant tax changes, Pal expresses hope that the government's recognition of the startup ecosystem indicates a commitment to nurturing innovation.

The emphasis on digital infrastructure and research and development (R&D) aligns with the core values of tech-driven ventures. Pal finds the allocation of a dedicated fund for women entrepreneurs in the interim budget commendable, considering it a crucial step toward promoting gender inclusivity in the entrepreneurial landscape. According to Pal, this financial commitment not only recognizes the untapped potential of women-led ventures but also empowers them to overcome traditional barriers. Increased access to capital, mentorship, and resources, he believes, can enable women founders to drive innovation and make significant contributions to economic growth.

While awaiting detailed policies, Pal remains optimistic that the government's trust in startups will translate into tangible support, catalyzing their journey. He sees this budget as highlighting the symbiotic relationship between the state and startups, emphasizing the crucial role they play in shaping India's economic future. Pal encourages leveraging this foundation to propel ventures into a future marked by innovation, resilience, and collaborative success

Finance Minister Nirmala Sitharaman briefs media persons after her Interim Budget 2024 presentation 

The Viksit Bharat Budget benefits every section of society and lays the foundation for a developed India.

The #ViksitBharatBudget benefits every section of the society and lays the foundation for a developed India. https://t.co/RgGTulmTac

— Narendra Modi (@narendramodi) February 1, 2024

Amrit Kaal as Kartavya Kaal: Reflecting on the pre-2014 era, Sitharaman acknowledges that every challenge during that period was successfully addressed through effective economic management and governance. A detailed roadmap for the pursuit of Viksit Bharat will be presented in the full Budget scheduled for July.

Promoting Investments: The Finance Minister highlights the significant growth in Foreign Direct Investment (FDI) inflow, reaching 596 billion USD during the period of 2014-2023. This marks a golden era, representing double the inflow observed from 2005-2014. To encourage sustained foreign investment, the government is actively engaged in negotiating bilateral investment treaties with foreign partners, aligning with the spirit of First Develop India (FDI).

Societal Changes: In response to the challenges arising from rapid population growth and demographic changes, the government announces the formation of a high-powered committee. This committee will engage in extensive deliberations and provide comprehensive recommendations to address these challenges effectively.

Finance Minister Nirmala Sitharaman announces several key initiatives:

Housing for Middle Class: A new scheme will be launched to assist deserving sections of the middle class residing in rented houses, slums, chawls, or unauthorized colonies in purchasing or constructing their own houses.

Aatma Nirbhar Oilseeds Abhiyan: Building upon the initiative introduced in 2022, a comprehensive strategy will be devised to achieve self-reliance in oilseeds, including mustard, groundnut, soybean, sesame, and sunflower. This initiative will encompass research in high-yielding varieties, adoption of modern farming techniques, market linkages, procurement, value addition, and crop insurance.

Matsya Sampada: Recognizing the potential for job generation, the government will continue its efforts in the fisheries sector, building on the establishment of a separate department for fisheries.

Ayushman Bharat: Health care coverage under Ayushman Bharat will be expanded to include all ASHA workers, along with all Anganwadi workers and helpers.

Maternal and Child Health Care: Various schemes under maternal and child health care will be consolidated into a comprehensive program to enhance synergy in implementation. Upgradation of Anganwadi centers under Saksham Anganwadi and Poshan 2.0 will be accelerated to improve nutrition delivery, early childhood care, and development. The newly designed U-Win platform for managing immunization and intensified efforts of Mission Indradhanush will be rolled out.

FM Nirmala Sitharaman: Social Justice was largely a political slogan. For our government, social justice is an effective and necessary governance model

Social Justice was largely a political slogan. For our government, social justice is an effective and necessary governance model !!

The saturation approach of covering all eligible people is the true and comprehensive achievement of social justice, this is secularism in action,… pic.twitter.com/6Mawe7TjIi

— PIB India (@PIB_India) February 1, 2024

Finance Minister Nirmala Sitharaman envisions a prosperous Bharat under the vision of Viksit Bharat, characterized by harmony with nature, modern infrastructure, and abundant opportunities for all to realize their potential.

She anticipates the next five years as a period of unprecedented development, marking golden moments on the path to achieving the goal of a developed India by 2047. Sitharaman emphasizes the trinity of democracy, demography, and diversity, reinforced by Sab Ka Prayaas, as having the potential to fulfill the aspirations of every Indian.

Finance Minister Nirmala Sitharaman emphasizes that, in addition to achieving high economic growth, the government places equal emphasis on a more comprehensive GDP encompassing Governance, Development, and Performance. 

The administration is characterized by transparency, accountability, and a people-centric, trust-based approach, prioritizing citizens with a commitment to minimal government and maximum governance. The nation benefits from macroeconomic stability, robust investments, and a thriving economy, enabling individuals to pursue their aspirations. 

Average real income has witnessed a significant 50% increase, inflation remains moderate, and effective and timely delivery of programs and large-scale projects is evident. The government's focus extends beyond economic growth to holistic development and performance across various sectors.

Finance Minister Nirmala Sitharaman underscores the impact of the PM Mudra Yojana, which has sanctioned 43 crore loans totalling Rs. 22.5 lakh crore, supporting the entrepreneurial aspirations of the youth. She highlights the assistance provided to the youth through initiatives such as Fund of Funds, Startup India, and Startup Credit Guarantee Schemes.

Sitharaman contrasts the current approach with the previous strategy for tackling poverty, noting that empowering the poor as partners in the development process significantly enhances the government's ability to assist them. Over the past decade, the government has successfully supported 25 crore individuals in breaking free from multidimensional poverty.

Finance Minister Nirmala Sitharaman emphasizes the government's commitment to prioritizing the needs and aspirations of the poor, women, youth, and farmers (Anna Data). Their welfare stands as the highest priority, and the government provides robust support to ensure their empowerment and well-being, ultimately driving the nation forward.

Sitharaman underscores the government's dedication to social justice as an effective and necessary governance model. The saturation approach, covering all eligible individuals, is identified as a true and comprehensive achievement of social justice. This approach, according to Sitharaman, embodies secularism in action, reduces corruption, and prevents nepotism.

The Finance Minister highlights the importance of transparency and assurance in delivering benefits to all eligible individuals, regardless of their social standing. The government aims to provide equal access to opportunities, addressing systemic inequalities that have persisted in society. The focus is on outcomes rather than mere outlays, aiming for socioeconomic transformation.

Finance Minister Nirmala Sitharaman expressed, "Our youthful nation is filled with lofty aspirations, taking pride in its current achievements and harboring hope and confidence for a luminous future. We anticipate that the government, propelled by its remarkable initiatives, will once again receive a resounding mandate from the people."

The Modi government is steadfast in its commitment to "all-round, all-pervasive, all-inclusive development." Sitharaman affirms that the Central government is diligently working towards transforming India into a developed nation by 2024.

"I am hopeful that our government, through its remarkable efforts, will garner strong support from the people once again."

She notes that the benefits of development are reaching the populace on a significant scale, instilling a renewed sense of purpose in the country. In the second term under Prime Minister Modi's leadership, the government has redoubled its efforts to advance its agenda.

Anjali Bansal, representing Avaana Capital Climate and Sustainability Fund, expresses eager anticipation for the upcoming 2024 Union Budget, drawing inspiration from the previous year's emphasis on sustainability. The fund hopes for continued backing from the Honorable Finance Minister, particularly for innovative technology startups dedicated to climate action. Following India's successful G20 presidency and COP 28 dialogue, there is a heightened awareness of the urgent need for climate action.

Given India's strategic position in navigating climate challenges and opportunities, the fund advocates for leveraging the country's youth and technology to provide global solutions, emphasizing South-South cooperation. Specific measures are sought in areas such as energy transition, storage, batteries, electric mobility, climate-resilient agriculture, and industrial decarbonization. The vision aligns with a swift yet environmentally conscious "Viskit Bharat" through green industrialization.

Similar to the previous year, there is a keen expectation for a budget that aligns with sustainability goals, prioritizing green initiatives to address both national and global challenges. An appeal is made for the government's support in establishing a green fund facility, fostering innovation and indigenous technology solutions dedicated to climate action, with a particular focus on adaptation and resilience building.

Once again, Finance Minister Nirmala Sitharaman has chosen to present the interim Budget 2024-25 in a paperless format, continuing the trend from the past three years. Opting for a digital tablet enclosed in a traditional 'bahi-khata' style pouch, she departed from the conventional 'briefcase' picture outside her office with her team of officials before meeting the President. Instead of the traditional briefcase, she held a tablet for the digital presentation of the Budget, securely encased in a red cover adorned with a golden-coloured national emblem. Following her meeting with President Droupadi Murmu at Rashtrapati Bhawan, Sitharaman proceeded directly to Parliament. It is noteworthy that Sitharaman, India's first full-time woman finance minister, had embraced the traditional 'bahi-khata' in July 2019, discarding the colonial legacy of the Budget briefcase.

Rashtrapati Bhavan releases photographs of Union Finance Minister Nirmala Sitharaman calling on President Droupadi Murmu along with Ministers of State Dr Bhagwat Kishanrao Karad and Pankaj Chaudhary, and senior officials of the Ministry of Finance.

President Murmu extended her best wishes to the Union Finance Minister.

Union Minister of Finance and Corporate Affairs Smt Nirmala Sitharaman along with Ministers of State Dr Bhagwat Kishanrao Karad and Shri Pankaj Chaudhary and senior officials of the Ministry of Finance called on President Droupadi Murmu at Rashtrapati Bhavan before presenting the… pic.twitter.com/miwSv8r4dE

— President of India (@rashtrapatibhvn) February 1, 2024

Union Cabinet meets in Parliament, ahead of the presentation of the Interim Budget by Finance Minister Nirmala Sitharaman

Just ahead of the Union budget on Thursday, oil marketing companies (OMCs) raised the price of commercial LPG. As a result, the cost of a commercial LPG cylinder (19 kg) has increased, while the price of a domestic LPG cylinder (14.2 kg) remains unchanged.

Effective January 1, the commercial cylinder saw a hike of ₹1.50, whereas the rates for the domestic cylinder have remained steady since August 2023. OMCs routinely review prices on the first day of each month, deciding whether to increase, decrease, or maintain the existing rates.

In Delhi, the commercial LPG cylinder is now priced at ₹1769.50, up from ₹1755.50, while customers in Mumbai face a cost of ₹1723.50, increased from ₹1708.50. Kolkata sees a new price of ₹1887, and in Chennai, the revised cost is ₹1937, compared to the earlier prices of ₹1869 and ₹1924.50, respectively.

Building upon last year's success, where the economy stood at a robust 7.3%, the government is poised to make further strides. In the upcoming interim budget, there are expectations of an increase in the allocation for the PM Kisan scheme, potentially raising it from Rs 6,000 to Rs 8,000 per farmer, along with a focus on bolstering Nari Shakti initiatives. A

According to KV Subramaniam, IMF Executive Director, the policies implemented during the pandemic, which embraced a combination of supply and demand strategies, have notably benefited those in need. Furthermore, there has been a substantial increase of almost 3.5% in capital expenditure, contributing to the resilience and strength of India's economy.

Before the FM presents the vote on account, here is a (Apr-Dec 2023). At Rs 22.8 trillion, in the first 9 months of this fiscal year, credit flow is 1.6 times higher, compared to Rs 14.1 trillion for the same period in the previous fiscal. The credit flow growth across sectors, such as Agriculture (1.5x), MSME (1.7x), Infra (6.2x) and Services (1.4x), over the previous period, is outstanding! Rural credit is booming, which discredits all talk of rural distress. With such credit flow numbers, 7 per cent plus growth looks like the new normal in FY2024 and beyond.

* The program commences precisely at 9:00 am with a photo session involving the entire budget team.

* By 9:15 am, the Finance Minister is scheduled to meet with President Droupadi Murmu.

* At 10:00 am, the Finance Minister will make her way to the Parliament.

* A cabinet meeting is set to take place at 10:30 am, preceding the budget presentation.

* The much-anticipated Budget presentation by Finance Minister Nirmala Sitharaman is slated for 11:00 am.
 

Finance Minister Nirmala Sitharaman arrives at the Ministry of Finance as she is set to present the interim Budget today

Finance Minister Nirmala Sitharaman has left for the Ministry of Finance. MoS Finance Dr Bhagwat Kishanrao Karad, MoS Finance Pankaj Chaudhary and Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) have already arrived in the North Block.

Among the primary expectations of salaried individuals from the government is the desire to raise the income threshold for the highest tax rate from Rs 10 lakh to Rs 20 lakh, accompanied by a reduction in the tax rate from 30% to 25%. 

In terms of tax rebates, there is anticipation that concessions for individual taxpayers under Section 87A may lead to an increase in the overall tax exemption limit to Rs 8 lakh, up from the existing Rs 7 lakh, inclusive of rebates.

With many salaried individuals investing a portion of their income in real estate, expectations are high for announcements related to housing loan benefits. Currently, the deduction limit on home loan interest is capped at Rs 2 lakh per financial year under Section 24(b) of the Income Tax Act. 

In its pre-Budget 2024 assessment of the Indian economy, the Finance Ministry highlights the positive impact of the Goods and Services Tax (GST) adoption on domestic markets. The unification achieved through GST encourages larger-scale production and concurrently reduces logistics costs. The expansion of the tax base facilitated by GST is seen as a means to bolster the financial positions of both Union and state governments. This, in turn, is expected to empower growth-oriented public expenditures. Additionally, the Finance Ministry acknowledges the increasing credibility of the Reserve Bank of India (RBI) in curbing inflation. This credibility is deemed crucial in anchoring inflationary expectations, thereby fostering a stable interest rate environment. Such stability is anticipated to encourage both businesses and the public to make informed, long-term investment, and spending decisions.

Finance Minister Nirmala Sitharaman is scheduled to present the Interim Budget for 2024-25 on Thursday at 11 am in Lok Sabha. This marks her sixth consecutive budget presentation as Finance Minister and is also the final budget of the current Lok Sabha. Notably, the presentation will be in a paperless format, with the comprehensive budget slated for presentation once the new government assumes power following the 2024 Lok Sabha Elections.

The official platforms - www.indiabudget.gov.in and the Union Budget mobile app - have been designated as primary sources for vital announcements and budget-related documents. Android users can conveniently download the app from Google Play, while iPhone users can follow these steps to access the Union Budget Mobile App on the App Store.

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In anticipation of the Union Budget announcement on February 1, the Confederation of Indian Industry (CII) has put forth various recommendations to the Finance Ministry. These proposals encompass simplifying tax payment processes and revising the Capital Gains structure.

The CII has urged for a streamlined approach to personal tax payment, emphasizing tax certainty and improved ease in fulfilling tax obligations. Additionally, the industry body has called for an extension of the time limit for filing revised returns until the end of the Annual Year, aligning with the extended deadline for Form 67 submissions, to facilitate taxpayers in claiming or modifying foreign tax credits.

Read more HERE

Finance Minister Nirmala Sitharaman is expected to focus on the Modi government's decade-long economic performance in the upcoming budget. The budget is set to serve as an economic manifesto, articulating Prime Minister Narendra Modi's vision for the next five years and aligning with the Bharatiya Janata Party's agenda. The government aims to reduce the fiscal deficit by at least 50 basis points in 2024/25 from the current target of 5.9% of GDP, with potential measures including capping subsidies on food and fertilizers while introducing cost-effective welfare initiatives. There are also anticipations of increased capital spending to drive the country's economic growth.

In January, Goods and Services Tax (GST) collections reached an impressive figure, exceeding Rs 1.72 trillion, marking the second-highest monthly collection on record. This represents a growth of 10.4% compared to the previous year's Rs 1.56 trillion for the same month.

These GST figures were recorded until 5 pm on January 31. The robust collections may contribute to the government achieving higher figures for Central GST in the revised estimates (RE) for FY24 within the Interim Budget, potentially surpassing the figures outlined in the Budget Estimates (BE). However, it is anticipated that GST cess collections could align closely with the BE.

For the fiscal year 2023-24, the budget set targets of Rs 8.11 trillion from Central GST and Rs 1.45 trillion from the cess. While the finance ministry did not provide a detailed breakdown of CGST and cess collections for January, assuming CGST maintained similar figures as in October, based on comparable total GST collections, the GST on the central account for January could be estimated at Rs 7.01 trillion. As of December in FY24, CGST had accumulated Rs 6.29 trillion.

In its assessment of the Indian economy, the Ministry of Finance has stated that India's growth is anticipated to remain robust, backed by macroeconomic and financial stability. The official growth estimate for FY24 is currently set at 7.3%, and there is an expectation of a gradual decline in headline inflation to the target levels. The resilience of service exports and reduced oil import expenses have contributed to the decline in India's current account deficit to 1% of GDP in the initial half of FY24.

A vote-on-account is sanctioned by Parliament during the interim Budget.

The Parliament's endorsement of a vote-on-account enables the funding of ongoing activities and personnel salaries, with the interim budget in effect until March 31, 2024. Beyond this date, the spending authority of the existing government becomes constrained.

Although FM Nirmala Sitharaman has played down the likelihood of substantial declarations, business leaders anticipate potential policy announcements. These announcements might concentrate on invigorating manufacturing, allotting additional funds for infrastructure development, offering subsidies to the vehicle industry, and providing tax relief.

In an election year, the sitting government is unable to present a comprehensive budget. Consequently, the finance minister unveils an interim budget to address the government's financial aspects for a brief period. This arrangement persists until a newly elected government assumes office.

While there is no constitutional mandate for an interim budget, it has evolved into a customary practice for outgoing governments in the lead-up to elections.