Finance Minister Nirmala Sitharaman will present the first Union Budget of the Modi 3.0 government on Tuesday, with experts predicting tax reforms that will bring relief to the middle class. The budget, which Prime Minister Narendra Modi said would decide the direction of our work for the next five years, is also expected to stick to the plan of curbing the fiscal deficit.
This is also Sitharaman's seventh consecutive budget presentation, which will see her surpass the record set by Morarji Desai, who presented six consecutive budgets.
The first budget of the new government will stress job creation and infrastructure development as steps to fuel the country's economic growth, believe experts. While tax reforms are expected to bring relief to the common man and even the middle class, maintaining fiscal discipline will be imperative.
On fiscal deficit, the current projection is 5.1 per cent against 5.8 per cent in the last fiscal year. The Budget is expected to provide better-than-earlier projections as there has been tax buoyancy.
More welfare schemes are also likely, especially to keep the allies happy ahead of Assembly elections. The spotlight would also be on spending on key schemes, like NREGA, as well as key sectors like health and education.
There could also be incentive schemes for domestic and foreign companies to boost manufacturing in India, in 14 sectors, including electronics, semiconductors and pharmaceuticals.
With economic survey warning of risks from the surging equity market and subsequent risky derivatives trading, the budget could bring in measures such as an increase in capital gains tax on equity investments held long-term.
The government's continued focus on infrastructure and transportation will push it to hike capex allocation in Railways and the roadways and highways sectors.
There would also be measures to increase India's private consumption grew only by 4 per cent despite the economy growing at 8.2 per cent (provisional) in FY24.
