The Union Budget 2024, set to be presented on July 23, is eagerly anticipated by various stakeholders across the Indian economy. With the government’s focus on achieving developed nation status by 2047, the upcoming budget is expected to unveil a range of measures aimed at fostering economic growth, supporting businesses, and improving the overall standard of living for citizens.
Income Tax Changes
- The government is likely to raise the standard deduction limit from the current ₹50,000 to at least ₹1 lakh to provide relief to salaried individuals amid high inflation and rising costs.
- There may be significant reforms in the direct tax area, with the aim of improving tax collection and facilitating business transactions.
Startup and MSME Support
- Startups expect measures like tax deductions for angel investors, parity in taxation of capital gains from listed and unlisted shares, and relaxation of regulations for outbound investment by Alternative Investment Funds (AIFs).
- The government is expected to introduce initiatives to assist workforce development and job creation for MSMEs, including increased funding for upskilling and reskilling programs.
- The budget may include provisions to maintain the 45-day payment rule for MSMEs concerning large corporates and other purchasers.
Sectoral Expectations
- The FMCG sector anticipates a reduction in income tax slabs to boost consumer purchasing power, improved access to credit, and GST reforms to lower costs on branded food products.
- The insurance industry expects measures to achieve ‘Insurance for All by 2047’, including a composite license, differential capital requirements, and revised investment regulations.
- The electric vehicle (EV) industry expects the government to launch FAME-3, offer incentives for localizing EV components, and lower GST on EV services.
Infrastructure and Development
- The budget is likely to prioritize urban development projects, such as smart cities and sustainable infrastructure in tier-2 and tier-3 cities.
- Increased allocation is expected for sectors like railways, roads, aviation, and ports to support the government’s goal of achieving developed nation status by 2047.
The Union Budget 2024 is expected to focus on tax reforms, startup and MSME support, sectoral incentives, and infrastructure development to drive economic growth and improve the standard of living for citizens.
