Budget 2024: 5 Key Things To Watch Out For In The Interim Budget

Budget 2024: Finance Minister Nirmala Sitharaman is slated to reveal the last budget of the Modi 2.0 government before the imminent general elections on Thursday, February 01. The budget is expected to feature a combination of economic measures and specific initiatives aimed at pivotal voter demographics, including farmers and women. While budget 2024 is an interim budget with limited scope, specific aspects can impact your daily life. The interim Budget, however, presents an occasion for spectacle just weeks ahead of the Model Code of Conduct coming into force.

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While the precedence dictates that no major policy announcements are made in a vote on accounts, going by past conventions hasn’t stopped governments from making big announcements like the cash dole for farmers announced in the 2019 interim Budget.

The budget is expected to focus on infrastructure and buck a trend of spending big on new vote-garnering measures.

The budget would, however, provide an occasion to assess the fiscal health of the economy against the backdrop of robust economic growth. It would provide an occasion for the government to give a clear roadmap for achieving the Fiscal Responsibility and Budget Management Act (FRBMA) targets.

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Here are 5 key things to watch out for:

While Budget 2024 is an interim budget with limited scope, specific aspects can impact your daily life. Here are 5 key things to watch out for:

1. Tax changes: While major reforms are unlikely, there might be tweaks to income tax slabs, deductions, or other tax provisions. Pay attention to changes in tax filing procedures or digital initiatives that could affect you.
2. Essential services allocation: Watch for changes in funding for healthcare, education, and public transportation. Increased allocations could mean improved services and affordability, while cuts could impact accessibility.
3. Subsidies and social welfare schemes: Keep an eye out for adjustments to existing subsidies for fuel, food, or other essentials. Changes to social welfare programs like pensions or scholarships could directly affect your household finances. The government may also enhance the subsidy allocation for some segments like farmers, women, informal sector workers and unemployed youth to strengthen domestic private consumption, which is estimated to show a weak growth of 4.4 per cent in FY24.
4. Rural development initiatives: If you live in a rural area, pay attention to allocations for agriculture, irrigation, and rural infrastructure. These could impact agricultural output, job opportunities, and overall rural development.
5. Indirect taxes: Though less likely in an interim budget, potential changes in GST rates or exemptions on essential items could affect your purchasing power.

Additional things to consider:

• Impact on inflation: Any changes in government spending or taxation could affect inflation levels, impacting the cost of everyday goods and services.
• Job market outlook: Watch for announcements related to skill development, employment generation schemes, or support for specific industries, which could impact job opportunities.
• Overall economic sentiment: The budget speech and its reception can reflect the government’s confidence in the economy, potentially influencing consumer spending and business decisions.

Remember, the budget’s ultimate impact depends on how specific measures are implemented. Overall, an interim budget is a temporary measure needed in specific situations. While it ensures smooth functioning during transition periods, it’s important to remember that it’s not a substitute for a full budget with its comprehensive vision and long-term economic direction.