„The Economic Survey of India will be placed on the table of the Parliament on Monday, July 22, 2024. The budget for the Union Territory of Jammu and Kashmir will be presented on July 23, 2024. During this session, 6 statutory issues and 3 financial issues have been identified,” Parliamentary Affairs Ministry Kiran Rijiju said. He said.
The upcoming budget will be the Prime Minister Narendra Modi-led government’s first major policy announcement after taking office for a third term in May. The budget is set to provide a series of measures to combat unemployment and other persistent problems in the country.
What is Economic Analysis?
Prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance and developed under the supervision of the Chief Economic Adviser, the pre-Budget document provides insight into the economic situation and various indicators for 2023-24 (April). – March) and some overview for the current year.
The Economic Survey document may also give some idea of the tone and structure of the actual budget for 2024-25 to be presented on Tuesday. The first Economic Survey came into force in 1950-51 and was a part of the budget documents. In the 1960s, it was separated from the budget documents and presented the day before the Union Budget.
In 2022, the central theme was 'A Agile Approach’, which emphasized India’s economic response to the Covid-19 pandemic shock. By 2023, when the economy staged a broad-based recovery from pandemic-induced contraction, Russian-Ukraine conflicts and inflation, it was 'recovery complete’, and rose to its pre-pandemic growth trajectory.
Generally, along with sectoral chapters, the study document also includes new need-based chapters that require attention.
All eyes will be on key announcements by the finance minister and the government’s outlook guidance on the overall economy.
With this upcoming budget presentation, Finance Minister Nirmala Sitharaman will break the record of former Prime Minister Morarji Desai who presented five annual budgets and one interim budget as finance minister from 1959 to 1964. Sitharaman’s upcoming budget speech will be his seventh. Sitharaman has overtaken Manmohan Singh, Arun Jaitley, P Chidambaram and Yashwant Sinha Aghio who have presented 5 budgets each.
Key macro statistics to watch before budgeting
The Reserve Bank of India, in its latest fiscal policy meeting, raised its GDP forecast for the current year 2024-25 to 7.2 percent from 7 percent earlier. The strength of domestic demand has led the economy to a growth rate of 7 percent over the past few years.
Observing rising private consumption in the country, the International Monetary Fund (IMF), in its latest outlook, has raised India’s growth projections for 2024 to 7 percent from the previous 6.8 percent, with the country maintaining its fastest growing position among emerging markets and developing economies. The organization had projected a growth rate of 6.5 percent for 2024, revised down to 6.8 percent and now 7 percent. India continues to be the fastest growing large economy.
According to official data from the Government of India, the country’s GDP is expected to grow by 8.2 percent in the fiscal year 2023-24. India’s economy is projected to grow at 7.2 percent in 2022-23 and 8.7 percent in 2021-22.
As for inflation, the RBI has projected it at 4.5 per cent for 2024-25.
Rising food prices continued to be a headache for Indian consumers, with food inflation nearly doubling in June. Food inflation more than doubled to 8.36 percent last month from 4.63 percent in the same month of 2023, the data said.
India’s overall retail inflation rate hardened in June, moving away from the moderation it had seen in previous months, pushed down by rising food prices.
Retail inflation in India remains within the RBI’s comfort level of 2-6 percent, but above the best-case scenario of 4 percent. Apart from the recent suspensions, the RBI has raised the repo rate by 250 basis points across the board from May 2022 in a fight against inflation. Raising interest rates is a monetary policy tool that generally helps to suppress demand in the economy, thereby helping to reduce the rate of inflation. Repo rate is the rate of interest offered by RBI to other banks.
As food inflation continues to remain high, the Reserve Bank of India recently said it is too long to call the food price shock a medium-term one.
Highlights of the interim budget tabled on February 1, 2024:
The government has proposed to increase capital expenditure by 11.1 per cent to Rs 11.11 lakh crore in 2024-25, from 3.4 per cent of GDP. A capital expenditure, or capex, is used to set up long-term physical or fixed assets.
As for the fiscal deficit, the government has projected it to be 5.1 percent of the Gross Domestic Product (GDP) in 2024-25. The government has set a fiscal deficit target of 5.9 percent of gross domestic product (GDP) for 2023-24. 2023-24 fiscal deficit reduced to 5.8 per cent. The government aims to bring the fiscal deficit below 4.5 percent of GDP by 2025-26.
The difference between total revenue and total expenditure of the government is called fiscal deficit. It is an indication of the total borrowings required by the government.
The central government has not modified or increased the tax burden on the citizens to provide relief to the citizens.
The Interim Union Budget 2024 was presented on February 1 as the country was due to hold general elections later this year.
The interim budget was to take care of the financial needs of the interim period until a government was formed after the Lok Sabha elections, after which the full budget was to be presented by the new government.
Domestic demand – The robustness seen in private consumption and investment has its origins in the reforms and measures implemented by the government over the past 10 years.
Also, solid GDP growth projections, manageable inflation, political stability and signs of central bank tightening its monetary policy have all contributed to paint a bright picture for the Indian economy.
According to projections, India is expected to become the world’s third largest economy with a GDP of USD 5 trillion in the next three years. Next, India needs to become a $7 trillion economy in the next six to seven years (by 2030).
Budget in Parliament:
The Finance Minister will present the Union Budget in the Lok Sabha at 11 am on Tuesday, the budget day. The budget speech outlines the government’s fiscal policies, revenue and expenditure plans, taxation reforms and other significant announcements.
The budget is then subjected to extensive discussion and debate in both houses of Parliament, allowing members to scrutinize its provisions, raise concerns and propose amendments. After presentation and approval by Parliament, the Union Budget sets in motion a series of post-Budget activities aimed at implementing its provisions and achieving the outlined objectives.
On Budget Day morning, the Finance Minister will visit the North Block where the Finance Ministry is located. He will meet his ministry secretaries and then accompany them to the President’s residence to seek approval before presenting the budget. Half an hour before the presentation of the budget, a cabinet meeting is usually held under the chairmanship of the prime minister, where the budget is briefed to the ministers and approved by the cabinet.
Like some previous full Union budgets, Budget 2024 will also be presented in a paperless format.
„Oddany rozwiązywacz problemów. Przyjazny hipsterom praktykant bekonu. Miłośnik kawy. Nieuleczalny introwertyk. Student.