Budget size almost unchanged from interim, shows govt's commitment to fiscal prudence: Experts
Jul 23, 2024, 17:26 IST
The overall size of the budget has remained almost unchanged from the interim one presented in February, indicating the government's strong commitment to move along the fiscal prudence path, said experts on Tuesday. According to the Union Budget 2024-25 presented by Finance Minister Nirmala Sitharaman, the total expenditure in Budget Estimates (BE) 2024-25 is estimated at Rs 48,20,512 crore of which total capital expenditure is Rs 11,11,111 crore.
The total expenditure in the Interim Budget presented in February was estimated at Rs 47,65,768 crore of which total capital expenditure was Rs 11.11 lakh crore.
Debadatta Chand, Managing Director & CEO, Bank of Baroda, said the Union Budget complements the main takeaways from the Economic Survey and focusses clearly on medium term development of the economy.
"The overall size of the budget has remained almost unchanged from the interim one. The budget has shown strong intent on moving along the fiscal prudence path and targeted the fiscal deficit at 4.9 per cent for the year," he said.
The said action will keep the growth steady as well as robust not only for economy but also banking.
Aditi Nayar, Chief Economist, ICRA Limited, said the budget has kept the capital expenditure unchanged and pared the fiscal deficit to 4.9 per cent of GDP.
"The anticipated reiteration of the reduction in the fiscal deficit to below 4.5 per cent of GDP in FY2026 is welcome. Interestingly, the new medium term fiscal consolidation path has been linked to a reduction in the debt/GDP ratio instead of continued compression of the fiscal deficit/GDP ratio," she said.
Buoyed by improvement in revenue collection, the government has lowered fiscal deficit target to 4.9 per cent for the current financial year as against 5.1 per cent estimated in February's interim budget.
Ranen Banerjee, Partner and Leader Economic Advisory, PwC India, said that fiscal prudence is the highlight of the full Union Budget 2024-25. The government has gone with realistic projections on its revenue and expenditure estimates and refrained from announcing overly populist measures.
"The majority of the allocations, including the capex allocation, are as outlined in the interim budget, thus providing continuity. The capex being kept at INR 11.11 trillion was expected, given that the ability to consume this allocation is limited due to disruption from the elections in the first quarter and the second quarter being typically slowed down by the monsoons," Banerjee said.
"This is a welcome step that will create a skilled workforce to address the existing deficit and generate employment opportunities. Additionally, financial support for loans up to Rs 10 lakh for higher education will help students pursue higher education and acquire skills," he added.
Indian Institute of Insolvency Professionals of ICAI (IIIPI) Chairman Ashok Haldia said the budget proposals for an integrated technology platform and sprucing up NCLT infrastructure will provide a fillip to the Insolvency and Bankruptcy Code (IBC) regime.
IIIPI is promoted by ICAI.
Meanwhile, Kumarmangalam Vijay, Partner, JSA Advocates and Solicitors, opined that in its new avatar, it seems that the Modi government is keen to deliver on its promise of 'ease of doing business'.
The Institute of Company Secretaries of India (ICSI) said there has been a focus on the manufacturing sector in the budget. Measures have been taken for simplifying the FDI/ODI rules and regulations, and the tax regimes. The enhanced Mudra loan limit and the abolition of angel tax are all set to incentivize the startup and MSME ecosystem of the country.
"The nine priorities identified in this progressive and inclusive budget 2024 are aimed at generating ample opportunities for all. Besides agricultural reforms, the budget focuses on skilling, educating and employing the youth, a priority that the ICSI has been concentrating on," said ICSI President B Narasimhan.
Rajesh Magow, Co-Founder and Group CEO, MakeMyTrip, said the government's continued emphasis on infrastructure development is commendable. Enhanced road infrastructure will bolster the travel and tourism sector.
"We also welcome the initiatives to develop iconic spiritual and cultural sites into world-class tourist hotspots," Magow said.
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The total expenditure in the Interim Budget presented in February was estimated at Rs 47,65,768 crore of which total capital expenditure was Rs 11.11 lakh crore.
Debadatta Chand, Managing Director & CEO, Bank of Baroda, said the Union Budget complements the main takeaways from the Economic Survey and focusses clearly on medium term development of the economy.
"The overall size of the budget has remained almost unchanged from the interim one. The budget has shown strong intent on moving along the fiscal prudence path and targeted the fiscal deficit at 4.9 per cent for the year," he said.
The said action will keep the growth steady as well as robust not only for economy but also banking.
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"The anticipated reiteration of the reduction in the fiscal deficit to below 4.5 per cent of GDP in FY2026 is welcome. Interestingly, the new medium term fiscal consolidation path has been linked to a reduction in the debt/GDP ratio instead of continued compression of the fiscal deficit/GDP ratio," she said.
Buoyed by improvement in revenue collection, the government has lowered fiscal deficit target to 4.9 per cent for the current financial year as against 5.1 per cent estimated in February's interim budget.
Ranen Banerjee, Partner and Leader Economic Advisory, PwC India, said that fiscal prudence is the highlight of the full Union Budget 2024-25. The government has gone with realistic projections on its revenue and expenditure estimates and refrained from announcing overly populist measures.
"The majority of the allocations, including the capex allocation, are as outlined in the interim budget, thus providing continuity. The capex being kept at INR 11.11 trillion was expected, given that the ability to consume this allocation is limited due to disruption from the elections in the first quarter and the second quarter being typically slowed down by the monsoons," Banerjee said.
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Institute of Chartered Accountants of India (ICAI) President Ranjeet Kumar Agarwal said the government has announced five schemes to facilitate employment and skilling for 4.1 crore youth over the next five years with a central outlay of Rs 2 lakh crore. "This is a welcome step that will create a skilled workforce to address the existing deficit and generate employment opportunities. Additionally, financial support for loans up to Rs 10 lakh for higher education will help students pursue higher education and acquire skills," he added.
Indian Institute of Insolvency Professionals of ICAI (IIIPI) Chairman Ashok Haldia said the budget proposals for an integrated technology platform and sprucing up NCLT infrastructure will provide a fillip to the Insolvency and Bankruptcy Code (IBC) regime.
IIIPI is promoted by ICAI.
Meanwhile, Kumarmangalam Vijay, Partner, JSA Advocates and Solicitors, opined that in its new avatar, it seems that the Modi government is keen to deliver on its promise of 'ease of doing business'.
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"Its focus on making it simpler is evident from the abolition of the angel tax, the increase in new income tax regime thresholds, new Vivad se Vishwas Scheme 2024 for the resolution of pending cases and the increase in the threshold for appeal by tax departments at various levels, decriminalising the non-reporting of shares received from non-resident employers and reducing the period for re-opening of the cases," Vijay said. The Institute of Company Secretaries of India (ICSI) said there has been a focus on the manufacturing sector in the budget. Measures have been taken for simplifying the FDI/ODI rules and regulations, and the tax regimes. The enhanced Mudra loan limit and the abolition of angel tax are all set to incentivize the startup and MSME ecosystem of the country.
"The nine priorities identified in this progressive and inclusive budget 2024 are aimed at generating ample opportunities for all. Besides agricultural reforms, the budget focuses on skilling, educating and employing the youth, a priority that the ICSI has been concentrating on," said ICSI President B Narasimhan.
Rajesh Magow, Co-Founder and Group CEO, MakeMyTrip, said the government's continued emphasis on infrastructure development is commendable. Enhanced road infrastructure will bolster the travel and tourism sector.
"We also welcome the initiatives to develop iconic spiritual and cultural sites into world-class tourist hotspots," Magow said.
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Furthermore, he said the provision of credit for TCS against income tax under 'Income from Salaries' is logical and will provide much-desired relief to taxpayers who travel internationally.