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Preface

The Feb 1st, Budget day is near to us. The sentiments suggest that government would announce a series of measures in Union Budget FY24 that would help in the revival of the domestic economy. This time in Budget, The Where, How much, What are more important than before on course of headwinds in overall global economies from developing nations to the developed ones. Smart allocations through various majors could provide some degree of immunity to Indian economy.

Budget Focus

Expect Growth at core in Budget in spite of General Elections: Indian’s general elections are scheduled in 2024, ‘populist’ budget expectation, discussions is aligned with before election budgets. However Govt. has focused remained on growth on such historical events. We expect FY24 budget allocation to be growth focused.

Measures to Maintain Healthy Consumption:

Consumption is one the driving engine for Indian economy. Globally tight monetary policies to weigh high on demand, Hence various measures are expected in order to maintain healthy consumption rate.

Continuation of Thrust on Infrastructure:

Govt.’s focus on Infrastructure has been quit resilient through initiatives such as National Infrastructure Pipeline (NIP), Bharamala Pariyojana etc. NIP has target completion year of FY25 and acceleration of the same is possible. Roads and Highways cumulative network has remained subdued relative to preCovid and accordingly we expect budget to propose higher allocation in Infrastructure.

Accelerate growth of Manufacturing:

Manufacturing to remained a key area of focus. Manufacturing sector is one of the highest employment generation factor which could be in focus. A further extension of the concessional 15% corporate tax rate for new domestic manufacturing companies is likely, as a part of the government’s efforts to attract investments and aid job creation, according to sources privy to the matter.

Increase Attractiveness for Foreign Investors: Indian market witnessed outflow from Foreign Institutional investors (FII) in the tune of Rs 2,78,275 Cr in CY2022,start of CY2023 is no different. We expect some efforts to attract investments through rebate or any form of new initiatives, despite India remains a bright spot in overall global economy.

Fiscal Deficit Discipline remains key watch:

Higher subsidy towards foods and fertilizer caused a steep rise in expenditure. However Govt expected to meet 6.4% fiscal deficit target comfortably for FY23. amid rising interest rate scenario, discipline with fiscal deficit should continue albeit increased size of budget.

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