The Union Budget for fiscal 2024, to be presented by Finance Minister Nirmala Sitharaman, will set the foundation for taking India’s economic growth to the forecast rate of 6.8 per cent. This is Ms Sitharaman’s fifth Budget presentation since 2019.
Predictably, India’s middle class is looking for some form of income-tax relief. Though the tax slab wasn’t changed and no new deduction was announced last year, inflation has eaten into people’s earnings. They haven’t seen a change in tax rate since 2017-18 and in tax slab since July 2014.
Ms Sitharaman may be able to afford a balanced, not a populist, Budget since the general election is still a year and one more Union Budget away. Still, with Prime Minister Narendra Modi’s BJP hoping to win a third consecutive term, massive welfare programmes for farmers and the rural population can’t be ruled out.
The Finance Ministry had been considering increasing the limit under 80C, which includes investment in life insurance, fixed deposit, bonds, housing and public provident fund. If this happens, it will encourage savings and help raise rainy day funds of people whose savings were eroded at the height of the COVID-19 pandemic.