Finance Minister Nirmala Sitharaman will present the Interim Budget 2024 in a few days (February 1). Even though it is an interim budget, there are huge hopes for this too. It seems that the focus will be more on revenue, expenditure, economic performance, and fiscal deficit – forecasts. Let’s see the expectations of the sectors here.
Defense, railways, infrastructure development: These key issues will be discussed mainly in the budget, said Apoorva Seth, Head of Market Perspectives and Research, Samco Securities. Allocations for these items are expected to be higher in this interim budget in line with the Modi government’s priorities.
Future General India Life Insurance Company’s chief investment officer Neeraj Kumar said government spending on capex is likely to increase to overcome concerns over global growth. These include increased funding for the infrastructure sector, a focus on Digital India, green hydrogen, electric vehicles (EVs) and broadband growth.
What is the importance of Budget : Axis Securities estimates that government capex will increase by 10-15 percent in FY 2025. In the last financial year (FY 2024), the government has set a capex target of Rs.10 lakh crore. The focus is likely to be on infrastructure development such as roads, water, metro, railways, defence, digital infrastructure and green technologies. All these measures are beneficial for the banking sector for double digit credit growth. Opinions are being expressed that the insurance sector should reduce GST on certain types of insurance products to increase its reach.
Energy: The energy sector is eagerly awaiting the interim Union Budget with a focus on achieving a clean and sustainable future, said Kunal Gala, Partner, Deal Value Creation, BDO India. Hopes for a focus on green hydrogen and natural gas are high as the oil and gas industry seeks reforms to support renewable energy use and increase natural gas use.
Budget 2024 expectations on Electric vehicles (EV) sector: Experts stated that the focus on electric vehicles will be in the context of the government’s continuous efforts to promote the adoption of electric vehicles to reduce dependence on fossil fuels and solve air pollution problems.
Automobile sector on Budget 2024: Automobiles: Axis Securities said the government is likely to focus on increasing rural consumption and supporting discretionary spending. This focus is expected to benefit rural-focused two-wheeler and entry-level four-wheeler OEMs as well as auto subsidiaries that supply to such OEMs. Subsidies under FAME program are likely to continue with some rationalization.
Real Estate: Runwal Group Head of Sales, Marketing – CRM, Lucy Roychowdhury, expects a balanced budget that combines development-focused measures with populist initiatives. The government’s commitment to growth strategies including improved road connectivity and improved rail infrastructure is expected to continue. A reduction in tax rates is considered key to sustaining the momentum in the residential sector.
Manufacturing: Experts claim that the focus on the manufacturing sector is likely as the budget reforms promote the Make India policy. The primary focus of this year’s budget is to provide massive support to PLI schemes in India by providing better allocations and incentives.