Budget 2024 Expectations: Relief for Taxpayers, Boost for Employment and Insurance

The upcoming budget is highly anticipated, with many stakeholders hoping for measures to address current economic challenges and propel India’s growth trajectory. Here’s a breakdown of some of the most prominent expectations:

Taxation: Relief for the Middle Class and Salaried Individuals

After the lack of major tax announcements in the Interim Budget earlier this year, there’s a strong expectation that the salaried class and middle-income earners may finally see some relief in Budget 2024. This could come in the form of increased tax slabs or a hike in the standard deduction limit. The All India Federation of Tax Practitioners (AIFTP) has urged the government to significantly reduce personal income tax rates, with suggestions to raise the exemption limit to Rs. 5 lakh.

Focus on Employment Generation

With a continued focus on job creation, the government is expected to announce initiatives to boost employment across various sectors. This could involve increased spending on infrastructure projects, which are known to generate significant employment opportunities. Additionally, there might be announcements related to skilling and development programs to address the mismatch between job requirements and the skillsets of the workforce. Sectors like Media and Entertainment are expecting a particular focus on creating more jobs, as per statements by Minister of Information and Broadcasting Ashwini Vaishnaw.

Revamping the Insurance Sector

The government is planning a major reform in the insurance sector with the aim of achieving “Insurance for All by 2047.” This ambitious goal might be supported by the introduction of a bill amending the Insurance Act, 1938. Some of the proposed amendments include allowing composite licenses for life insurers to underwrite health or general insurance policies, facilitating the entry of specialized insurance companies with differential capital requirements, and easing solvency norms for micro-insurance and regional players. The introduction of captive licenses and changes in investment regulations are also part of the proposed reforms, all aimed at increasing insurance penetration and improving returns for policyholders.

Boost for Infrastructure and MSMEs

In line with the government’s focus on infrastructure development, Budget 2024 is likely to see increased allocation for infrastructure projects. This spending is expected to improve connectivity, create jobs, and stimulate overall economic activity. Micro, Small and Medium Enterprises (MSMEs), the backbone of the Indian economy, are also expecting a push in the budget. Experts anticipate measures like easier access to credit, simplified regulations, and support for digital transformation to empower MSMEs and contribute to their growth.

Other Key Expectations

The upcoming budget is likely to address a wide range of areas besides those mentioned above. Here’s a quick glimpse into some other key expectations:

• The renewable energy sector is hoping for increased support through measures like a revision of GST rates for renewable energy components and higher capital expenditure.
• The real estate sector is expecting policy reforms and incentives to address the evolving needs of homebuyers, developers, and investors.
• The government might announce steps to encourage crop diversification and increase farmers’ income.

Conclusion

The Union Budget 2024 is a crucial event that will set the tone for India’s economic growth in the coming year. With a focus on job creation, infrastructure development, and reforms in key sectors like insurance and MSMEs, the budget is expected to provide a much-needed impetus to the economy. Measures to improve the lives of middle-class taxpayers and salaried individuals are also high on the agenda. With just a few days left until the budget presentation, all eyes are on Finance Minister Nirmala Sitharaman to see how she navigates these expectations and unveils the government’s roadmap for the nation’s future.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.