Budget 2024

The recent budget presented by the Finance Minister is an interim budget. The full budget will come after the election once the new government is formed. The budget displayed confidence and continuation of the government’s vision. One thing to note is there are no short-term populist measures announced to please the people. Most of the policies are in continuation. 

FM reiterated the continued vision of Governance, Development, and Performance. There is a clear communication of the vision- ‘Developed and modern infrastructure.’ 

The Interim Budget 2024 prioritizes the welfare and aspirations of people with low incomes, women, youth, and farmers, aligning with the vision of Atmanirbhar Bharat. The interim Budget did not bring any shocks or pleasant surprises and announced no short-term measures.

Regarding measures impacting investor wealth positively:

  1. Direct Tax Proposal: The Finance Minister announced no changes in the current tax rates for direct taxes for FY 2024-25. Additionally, taxpayers earning up to Rs. 7 lakh will have no tax liability under the new tax regime.
  2. Capital Expenditure: The government has increased the outlay for capital expenditure by 11.1% to Rs 11.11 lakh crore, equivalent to 3.4% of GDP, aiming to stimulate economic activity and align with the long-term vision of a developed India (Viksit Bharat).
  3. Rooftop Solarization: Approximately 1 crore households will receive up to 300 units of free electricity per month, potentially saving households up to Rs 15,000–18,000 monthly. Companies such as Insolation Energy, Surana Solar, Solex Energy, etc., stand to benefit from this scheme.
  4. Electric Vehicles (EVs): The government is supporting the adoption of e-buses for public transportation networks and strengthening the e-vehicle ecosystem by supporting manufacturing and charging infrastructure, recognizing EVs as a significant part of the Auto Sector going forward.
  5. Railway Corridor Programs: The government is implementing three major railway corridor programs under PM Gati Shakti to enhance logistics efficiency and minimize costs, with a record allocation of Rs 2.4 lakh crore. Additionally, 75 Vande Bharat trains are set to roll out by August 2023.

The budget positively reflects India’s economic growth and macro stability, with fiscal deficit numbers at a positive surprise of 5.1%.

Overall, the budget is growth-oriented and aligns with the expectations of India becoming one of the fastest-growing economies globally. It focuses on core themes such as Healthcare, Infrastructure, Manufacturing, and Education, positioning India for significant progress over the next 5-10 years.

Given the positive road map shared by the government, we remain constructive on the equity markets.

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