Mon Feb 03 06:10:59 UTC 2025: ## India’s Budget 2024: Tax Relief, Fiscal Prudence, and Growth Focus

**New Delhi** – India’s Union Budget for 2024, presented today, prioritizes fiscal prudence while delivering significant tax relief for the middle class and boosting consumption, according to leading economists. The budget, totaling ₹50.65 lakh crore (a 7.4% increase over FY25), aims to accelerate India’s economic growth towards its “Viksit Bharat” (developed India) goal.

A key highlight is a substantial tax revamp under the new tax regime, resulting in an estimated ₹1 lakh crore revenue loss. This significant relief, targeting the middle class who have faced increased tax burdens recently, is expected to stimulate consumer spending and benefit fast-moving consumer goods (FMCG) companies. The sustained nature of these tax cuts is particularly positive for the market.

While industry sought increased capital expenditure (CAPEX), the budget reinstated the FY25 target of ₹11.2 lakh crore. This follows last year’s delays due to the election cycle. The government maintains its commitment to reducing the fiscal deficit to 4.5% in FY26 and 3% eventually, with net borrowings remaining at a manageable ₹11.54 lakh crore, preventing strain on banking system liquidity.

The budget also safeguards allocations for key social welfare programs like PM-Kisan, PM-Awas, and NREGA, ensuring continued support for vulnerable populations. Further, it introduces several structural reforms, including a credit guarantee scheme for MSMEs, a push for Public-Private Partnerships (PPPs) in infrastructure, facilitated by NaBFID, and allows 100% FDI in insurance with domestic investment mandates. Importantly, tariff reductions signal India’s commitment to global trade liberalization.

Overall, the budget is described as pragmatic and forward-looking, balancing revenue generation with essential expenditure, and setting the stage for sustained economic growth in the coming years. The Chief Economist of Bank of Baroda, who authored this analysis, emphasizes the budget’s success in optimizing outcomes across various fronts while working within fiscal constraints.

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