Fin Min Nirmala Sitharaman to Present Pre-Election Budget, Know Salient Factors

New Delhi: Union Finance Minister Nirmala Sitharaman will be presenting her sixth straight budget on Thursday. As it is a pre-election budget, it is expected to be a populist budget listing out the achievements of the Modi government and giving hints of the future plans.

It is expected that this budget will try to leave more money in the hands of the common man or push the reform agenda by staying on the fiscal glide path to lower the fiscal deficit to 4.5 per cent of GDP by 2025-26.

Sitharaman presented her first budget in 2019. Like past three years, this year’s budget will also be paperless instead of a traditional ‘bahi-khata’ wrapped in red cloth.

Here are some key points to watch out in the Budget 2024-25:

Fiscal Deficit: The budgeted fiscal deficit, which is the difference between the government expenditure and income, for the current fiscal ending March 2024 is 5.9 per cent, against 6.4 per cent in the last fiscal. The number for 2024-25 would be in focus as it is widely expected that the government would be liberal towards expenditures in an election year.

Disinvestment/Privatisation: In the current fiscal year the budgeted disinvestment target is likely to be missed, like in the past five years. It is expected the government would set a realistic target of sub-Rs 50,000 crore for next fiscal.

Capital Expenditure: The government’s planned capital expenditure for this fiscal year is budgeted at Rs 10 lakh crore, higher than Rs 7.3 lakh crore in the last fiscal.

Tax Revenue: The Budget had pegged direct and indirect tax mop-up at Rs 18.23 lakh crore and Rs 15.29 lakh crore for the current fiscal, taking the gross tax collection to Rs 33.61 lakh crore.

Borrowing: The government’s gross borrowing budget was at Rs 15.43 lakh crore in the current financial year ending March 31. The government borrows from the market to fund its fiscal deficit. The borrowing number would be watched by the market, especially on the back of expected higher capital expenditures to boost growth and populist announcements.

Nominal GDP: India’s nominal GDP growth (real GDP plus inflation) in the current fiscal is estimated to be 11 per cent. Real GDP growth in the current fiscal is projected at 7.3 per cent and 7 per cent in the next.

Extra spending on pro-poor schemes like MGNREGA, health and education is also expected.