Budget 2024: What does the common man want?

All eyes are on the Union government’s Budget. Finance Minister Nirmala Sitharaman is set to unveil the 2024 Budget of the Prime Minister Narendra Modi government on 1 February. Like the previous three full Union Budgets, the Budget 2024 will also be delivered in paperless form. This will be the last Budget of the second Modi government. The Halwa ceremony, which marks the final stage of the Budget preparation process for Budget 2024, was held in North Block on Wednesday. Sitharaman and Union Minister of State for Finance Dr Bhagwat Kisanrao Karad were present among a slew of other dignitaries on the occasion. But what does the common man want from the Budget? Let’s take a closer look: First, it is important to note that Sitharaman will not be presenting a full Budget this year. This Budget will be an interim budget.

This is because 2024 is an election year.

In such cases, the Union government lays out an interim budget which delineates expenses and income. This budget helps the government to manage its financial obligations until a new government is formed. The Economic Times, conducting a poll ahead of the Union Budget, found some interesting results. It reported that over 49 per cent of respondents said the budget would lay the groundwork for the full budget. Another 26.5 per cent expect Sitharaman to give ‘general economic guidance.’ Of the respondents, 38.4 per cent want a direct overhaul of the tax system. Another 24.7 per cent want fuel and alcohol to be brought under the ambit of the GST. Twenty-two per cent of those polled want east of doing business to be made easier. And 15 per cent are hopeful that programmes ins technology and artificial intelligence will be announced. As per Mint, the common man has a few requests. These include

• Increasing the basic exemption limit
• Increasing the NPS limit under 80C
• Interest deduction for housing loans under new regime
• Change in tax slabs

Experts say the salaried are looking forward to an increase in the basic exemption limit. Abhishek Soni, CEO and Co-founder of Tax2win, told Mint, “With budget 2024, salaried individuals are hoping for an increase in the basic exemption limit under both the new and old tax regimes and they are also viewing an increase in the limit of standard deduction under both the tax regimes. They are also expecting HRA exemption, and health insurance premium deduction under the new regime too.” Mumbai-based tax and investment expert Balwant Jain told the outlet, “The earlier limit of ₹1 lakh was fixed way back in 2003. It has been almost 18 years since the original limit of ₹1 lakh was fixed. It has only been increased by 50 per  cent in 2014 which works out to just less than three per cent annually. This annual average increase is not even on par with average inflation during the same period. In my opinion, this should be directly raised minimum to ₹2.50 lakh.” The finance minister had in 2023 tweaked tax slabs for those opting for the new regime. Agam Gupta, exеcutivе dirеctor, Sharе India Fincap, added, “Tax slabs have remained unchanged since 2014, burdening households with higher real tax rates each year. Indexing tax slab limits to inflation would put more money in the hands of middle-class consumers to counter cost pressures without fiscal damage." The Federation of Indian Chambers of Commerce and Industry (FICCI) has presented a set of comprehensive recommendations ahead of the Interim Union Budget. [caption id=“attachment_13072802” align=“alignnone” width=“640”] Representational image. Moneycontrol[/caption] The proposals span a spectrum of sectors, ranging from public investments to support for micro, small, and medium-sized enterprises (MSMEs), innovation, taxation, and the burgeoning start-up ecosystem. Building on the encouraging data regarding capital formation and the increased investment-to-GDP ratio, FICCI emphasizes the need for continued public capital expenditure, particularly in physical, social, and digital infrastructure. Rajesh Sharma, managing director at Capri Global Capital Limited, told Economic Times, “As we approach the 2024 Interim Budget, we hold optimism for a fiscally astute and forward-looking plan. While major policy changes might not be in the cards, we expect the budget aims to support Small and Medium Enterprises (SMEs) and stay on fiscal consolidation path. We’re expecting the budget to acknowledge and encourage fintech’s role in helping small businesses with the goal to create a friendly environment for businesses in India’s changing economy.” “As Non-Banking Financial Companies (NBFCs) are in the spotlight for shaping the country’s economic path and understand the financial needs of many, especially those who are unbanked. We expect a boost in digital inclusivity, with banks and NBFCs leading the charge in using technology for positive change. In our optimistic outlook, we believe that this budget not only foresees positive strides for the financial sector but also serves as a testament to the nation’s readiness to embrace change as a catalyst for sustained economic growth,” Sharma added.

Others say populist moves aren’t likely.

Satish Ramanathan, CIO, Equity, JM Financial Asset Management Ltd, told the newspaper, “Given the current mood, we do not anticipate any populism in the budget. We do not expect that the Government will go for major announcements in an “interim budget”, before the elections. They may signal their intent on continuing on the path of pragmatic fiscal management with a continued focus on infra spending and spending on social infrastructure. One area where we may expect some positive relief is on personal income tax. There may be some rationalisation of tax slabs and rates. A budget which broadly reflects the past trends while laying down the big picture for the way ahead, may be welcomed by the market and be supportive of the economy.” The Budget documents will be available on the Union Budget Mobile App after the completion of the Budget Speech by Sitharaman on 1 February, 2024. With inputs from agencies