All eyes and ears are on the 2024-25 Union Budget. With so much happening in terms of National Growth and development, it’s hard to draw a straight line and accurately project the outcome of this year’s budget.
Well, as an established FinTech company, it’s only natural to make predictions. With this notion, we’ve gathered some expert opinion and insights to foretell the government’s actions for this year’s Revenue, Expenditure, and Capital Allocation.
The expectations are based on various factors inclusive of economic growth, inflation, and government priorities. These expectations can affect the Stock Market, Fixed Deposits, and other Investment decisions as well.
To make sound financial decisions, it’s wise to stay well informed and ahead of the curve by understanding the latest developments related to Budget 2024-25.
|
- The Indian Government may aim to reduce the fiscal deficit this year even though capital expenditure is at an all-time high.
- We can expect the government to prioritize long-term investments, such as infrastructure projects, over short-term spending.
- Higher capital could be allocated to schemes related to low-cost urban and rural housing, drinking water supply, smart city development, PLI, PM-Kisan Samman Nidhi.
- Government programs for funding start-ups in manufacturing that have growth potential, may be provided with higher levels of funding and subsidy.
- Higher capital may be allocated to Government Infrastructure including Roads, Railways, Airports, Seaports, etc.
- Direct Cash Transfers (DCTs) may continue scaling but Farm Infrastructure could continue dwindling.
- The annual growth rate of the agrarian sector is projected to be at 1.8%.
- However, due to poor weather conditions, the fallout of climate change, and inflationary pressures, the agrarian sector may receive additional support with financial and infrastructural support.
- Nearly 8% of India’s GDP is expected to be contributed by Micro, Small and Medium enterprises.
- The Oil and Gas sector may see a hike in fund allocation in an attempt to prompt the Green and Sustainable Energy sector.
- For scientific and technological R&D, India currently spends 0.64% of GDP while we can expect a growth of at least 1.5% of GDP.
- A significant amount of capital expenditure may be allocated to the Sports Fraternity to set up and upgrade existing sports facilities in light of the PM's announcement to bid for the 2036 Olympics.
|
Key Projections for the Energy Sector:
|
Considering last year’s declarations, funding for battery-based storage systems is likely to continue growing this year as well, while new schemes for Green Hydrogen, Offshore Wind Power and Biogas could be introduced.
High chances of growth in the Renewable Energy sector as the allocation has risen by 260% over FY20-24.
Expect proactive measures and incentives to boost Manufacturing, Research and Development Hubs, coupled with a decrease in GST rates.
Companies in the energy sector are also expecting a reduction in basic customs duty on solar cells.
With increased demand in the EV sector, there’s hope for a reduction of tax on lithium-ion batteries which is currently 18%.
|
Key Projections for Infrastructure Space Allotment:
|
The Interim Budget of 2024 is expected to give priority to Rural and Urban connectivity, railways, ports, aviation, and highways, recognizing their significant impact on growth and employment.
The National Highways Authority of India (NHAI) is expected to persist in its focus on reducing external debt through Asset Monetization, BOT (Toll) mode project awards, and increased budgetary spending.
CARE Ratings anticipate a 20% year-on-year increase in budgetary allocations for the Roads and Highways sector in the Union Budget of 2024-25.
Tax relief on capital gains and interest income from Infrastructure Investment Trusts (InvITs) could stimulate investor interest in InvITs, unlocking the Asset Monetization potential for the Roads sector.
ICRA predicts a 16-21% year-on-year increase in road execution activity, reaching 12,000-12,500 km in FY24, which falls short of the government's target of 14,000 km.
|
These are mere projections based on the ongoing Financial Developments of the nation. Some may come true while others could turn the other way around. The best we can do is wait for the budget to be announced and see what the year FY2024 -25 looks like in terms of Growth, Productivity, and Development.
Note: We will be Live on Twitter on 1st Feb'24, sharing the budget update. Follow Us on Twitter to get all the updates on time.
|
|
|
Innovage Investment Advisers Private Limited
Registered address: A 703/704, Eureka Towers, Mind Space, Malad (West), Mumbai - 400064.
SEBI registered Investment Adviser having registration no. INA 000003809 (Valid from 13th Nov 2015 - Perpetual). AMFI Distributor Number: ARN No. 87155. (IRDAI) registration no. CA0339
Mutual Fund investments are subject to market risks, read all scheme related documents carefully before investing.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Registration granted by SEBI, membership of BASL and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
|
|
|
|
