**2024 Budget Plans to Boost Energy-Efficient Policies with Major Reforms Expected**
The upcoming Union Budget in 2024 marks a crucial juncture as the nation gears up for general elections the following year. The Budget 2024 is expected to serve as a Vote on Account rather than a full Budget preceding the polls. Scheduled to be delivered by Union Finance Minister Nirmala Sitharaman from the new parliament building on February 1, 2024, the full Budget for FY25 is anticipated to be presented in July, post the formation of the new government.
The Budget 2024 arrives amidst a robust domestic economic environment, despite global uncertainties. Notably, India’s Gross Domestic Product (GDP) registered a growth of 7.6% in the July-September 2023 quarter. This momentum was further underscored by a resilient 7.8% expansion in the economy during the first quarter of FY24, attributed to strong domestic demand, even amidst a global economic slowdown that exerted pressure on exports.
Looking ahead, the economic outlook presents a series of potential risks and opportunities. Deloitte India highlights the upside risks, including strong economic growth, substantial spending on infrastructure, and a resurgence in the MSME sector. Conversely, downside risks encompass factors such as inflationary pressures, election uncertainties, geopolitical concerns, and varying demand gaps.
Rumki Majumdar, an Economist at Deloitte India, emphasizes the critical role of domestic demand, particularly private consumption and investment spending, in propelling India’s growth trajectory. However, she also highlights the potential impact of inflation on growth stability, forecasting higher prices over the next 1.5 years, with inflation expected to hover within the upper range of the RBI’s target band during the forecast period.
Over the past five years, the government has demonstrated a steadfast commitment to fortifying the nation’s infrastructure. Speculations are rife that the forthcoming Budget is likely to allocate resources towards enhancing port and shipping facilities, bolstering energy infrastructure, with a focus on green and sustainable energy, and uplifting urban infrastructure.
Amid growing emphasis on transitioning from carbon-dependent to energy-efficient policies, Deloitte India places significant expectations on the Budget 2024. The government’s increased focus on capital expenditure is positioned to attract capital spending. Nevertheless, achieving this objective is contingent upon government incentives and strategic measures, as outlined by Deloitte India.
While export growth contracted by 7.7% in Q1FY24, primarily driven by deceleration in the growth of major economies, the imperative of revitalizing exports in diversified and new markets cannot be overstated. Furthermore, diverting savings from subsidies towards initiatives that support sustainable income growth in rural households is anticipated to augment the disposable income of the rural economy.
In lockstep with these projections, Deloitte India advocates for incentives such as expanding the scope of Production-Linked Incentive (PLI) schemes to encompass sectors like chemicals and services, thereby stimulating demand for increased manufacturing. Additionally, the provision of financial support for the Remission of Duties and Taxes on Exported Products (RoDTEP) and other export promotion endeavors is fervently recommended by Deloitte India.
In conclusion, the forthcoming Union Budget in 2024 embarks on a pivotal journey, striving to invigorate energy-efficient policies while navigating a dynamic economic landscape. The concerted efforts towards bolstering infrastructure, fostering sustainable growth, and leveraging strategic incentives are poised to underpin India’s trajectory towards a more resilient, inclusive, and prosperous future. As the Budget 2024 unfolds, stakeholders eagerly anticipate the transformative policies and initiatives that will shape the nation’s economic narrative and sow the seeds for sustained progress and development.