Budget 2024: Expectation of increased capital spending and a more standardized approach to taxation

Finance Minister Nirmala Sitharaman will present the first budget of Modi 3.0 government. In this budget, there may be an increase in capital expenditure in the full budget for the financial year 2024-25. Also, the government can announce an initiative to adopt a more standardized approach to taxation. Moody’s Analytics has expected this from the budget to be presented. According to Bhasha news, Moody’s Analytics economist Aditi Raman says that after losing its absolute majority in the Lok Sabha in June, Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) will try to instill public confidence in the new coalition government.

Raman said tax rates were retained in the interim budget but any increase in planned government expenditure would have to be accompanied by higher taxes through direct or indirect taxation to prevent the deficit from increasing. He said that at present no major change is expected in India’s economic policy. This post-election budget will strengthen the targets set earlier. Earlier in the interim budget, emphasis was laid on spending on infrastructure, support to the manufacturing sector and fiscal prudence.

Moody’s Analytics said the budget will impact business and consumer confidence. The budget will maintain or perhaps even increase funding for capital expenditure on infrastructure and incentive schemes linked to production. Raman said the budget is likely to introduce a more standardized approach to taxation, but the broader emphasis will be on continuing policies.