Budget 2024: The Government of India will present the full budget for the financial year 2024-25 on July 23 and Finance Minister Nirmala Sitharaman will present the country’s budget in Parliament as the Finance Minister for the 7th consecutive time. Not only the country’s economic institutions and financial experts but also foreign economic institutions are keeping an eye on India’s budget.
Global brokerage company Morgan Stanley’s opinion regarding India’s budget
Global brokerage company Morgan Stanley has released a report on Wednesday regarding the budget of Modi 3.0 government on July 23. Morgan Stanley has estimated that the budget may present a blueprint for ‘developed India’ till 2047 and a plan for fiscal consolidation. Union Finance Minister Nirmala Sitharaman will focus on presenting medium-term plans in the budget to come in late July to bring India as a developed country after 23 years.
Morgan Stanley changes outlook on jobs and income tax
Morgan Stanley does not expect a personal income tax cut as its base case, as the media reported in June. The research firm said in the note that the medium term goal of creating job opportunities in India will be achieved through capital expenditure. It is estimated that the share of capital expenditure in GDP will increase from 3.2 percent in FY 2024 to 3.5 percent in FY 2025.
Mentioned the budget allocation of Power Grid and NTPC
Research firm Morgan Stanley also said in its note that the government will increase the allocation to Power Grid and NTPC compared to the interim budget allocation. There are expectations that the government is likely to increase the allocation in the Pradhan Mantri Awas Yojana (PMAY) to increase demand in Tier 2-3 cities. Clarity on EV incentives including launch of FAME 3 as the current scheme, Electric Mobility Promotion Scheme (EMPS) will end on July 31, 2024.
What is special in Morgan Stanley’s report?
- Morgan Stanley estimates that with a fiscally prudent approach, the emphasis will remain on capital expenditure rather than revenue expenditure.
- Along with this, focus will be given to targeted social sectors along with improving access to physical, social and digital infrastructure.
- It is also expected in the budget that special attention will be given to the outline and planning for a developed India by the year 2047.
- This budget is expected to contain a medium-term plan for fiscal consolidation beyond 2025-26.
- The medium term target of creating more jobs for the growing workforce will be better achieved by focusing on capital expenditure.
Brokerage company’s estimate regarding GDP
The brokerage company has estimated that the fiscal deficit target for the current financial year will remain at 5.1 percent of GDP. This is in accordance with the target set in the interim budget. Along with this, the government will also stick to the target of bringing it to 4.5 percent by the next financial year. The fiscal deficit in the financial year 2023-24 was 5.6 percent of GDP. The brokerage company said that with this, considering the possibility of better tax and non-tax revenue, the fiscal deficit target may be slightly lower i.e. less than 5.1 percent.
Dividend more than RBI’s expectations filled the enthusiasm
According to the report, with the receipt of higher than expected dividend from the Reserve Bank of India (RBI), the prospects for the exchequer have improved. This will help in maintaining the pace of capital expenditure and increasing spending on targeted public welfare measures.
read this also
Millionaires in World: Millionaires will increase across the world, Ganga will flow in reverse in United Kingdom and Netherlands.
