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Below the Quote on Budget  by Suman Bannerjee, CIO, Hedonova

The Union Budget 2024, while aiming to balance growth and equity, presents a complex mix of policies with varied impacts. The revised income tax slabs, offering relief for the middle class, are countered by significant changes in capital gains taxation. Short-term capital gains tax has been increased to 20%, and long-term capital gains tax is now 12.5% for specific assets, potentially discouraging investment. Additionally, the hike in Securities Transaction Tax (STT) from 0.1% to 0.2% for equity transactions and increases for futures and options trading could further dampen market activity and trading volumes. 

Substantial allocations for infrastructure, with a capex outlay retained at Rs 11.1 lakh crore, and job creation initiatives, including a Rs 2 lakh crore allocation over five years, signal a strong commitment to economic stimulation. However, the efficacy of these measures depends heavily on effective implementation and the actual absorption of funds. The budget also emphasises women-centric schemes, with Rs 3 lakh crore allocated, and agricultural resilience, with Rs 1.52 lakh crore for agriculture and allied sectors, reflecting an inclusive growth agenda. 

Despite these initiatives, the fiscal deficit target of 4.9% of GDP raises concerns about fiscal prudence and debt sustainability, particularly in a global economic environment fraught with uncertainties. The commitment to lowering duties for properties purchased by women and setting up industrial parks indicates a push towards socio-economic equity, but the actual impact remains to be seen. Ultimately, the Budget's success hinges on efficient execution and the government's ability to navigate external economic challenges while achieving its ambitious domestic goals.

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