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Below the pre-budget expectations on behalf of  Gurmeet Singh Chawla, Director at Master Capital Services Ltd.

Budget 2024 will be announced on February 1 by Union Finance Minister Nirmala Sitharaman. This budget typically outlines estimates for revenue, expenditure, financial performance, fiscal deficit, and projections. Due to its interim nature and the upcoming Lok Sabha elections in India projected for April to May 2024, no major declarations are expected. The detailed budget unveiling will take place after the elections and the establishment of a new government.

Anticipations are high that the government will increase welfare spending and potentially aim to decrease the fiscal deficit to 4.5% of the GDP by FY26. Expectations include tax relief measures and announcements to support agriculture and the rural sector while maintaining a focus on the capex push. This sector grappled with immediate challenges such as adverse weather conditions, the impact of climate change, and inflationary pressures. Government spending on capex is expected to increase to offset global growth concerns. Allocation of more funds to the infrastructure segment and focus on the growth of digitized India, green hydrogen, EVs, and broadband are also expected.

For the upcoming fiscal year, India is considering allocating approximately Rs 4 trillion ($48 billion) for food and fertilizer subsidies. The Ministry of Consumer Affairs, Food, and Public Distribution has forecasted a food subsidy expenditure of $26.52 billion for FY25, indicating a 10% rise from the anticipated allocation of nearly $24.11 billion in FY24. Signs suggest a potential surge of more than 15% in funding for affordable housing, reaching Rs 1 trillion ($12 billion) for the fiscal year 2024-2025. The divestment target is set at Rs 510 billion ($6 billion).

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