Finance Minister Nirmala Sitharaman is set to unveil her seventh consecutive Budget on Tuesday, outlining a roadmap towards a "Viksit Bharat" (developed India) by 2047. The presentation will also offer an overview of the performance over the past decade.
Attention will be focused on whether Sitharaman will deliver the anticipated tax relief for the middle class, potentially increasing their disposable income amid current tax buoyancy. Additionally, markets are looking for a continued commitment to the fiscal glide path, aiming to reduce the fiscal deficit to 4.5% of GDP by 2025-26.
Key Numbers to Watch in Modi 3.0's First Full Budget
Fiscal Deficit: The fiscal deficit for the current fiscal year is projected at 5.1%, as outlined in the Interim Budget in February, compared to 5.8% in the previous fiscal year. The full Budget is expected to present improved figures due to tax buoyancy. The government aims to reduce the fiscal deficit to 4.5% of GDP by FY26.
Capital Expenditure: The planned capital expenditure for this fiscal year is set at ₹11.1 lakh crore, up from ₹9.5 lakh crore last year. This increase reflects the government's focus on infrastructure development and efforts to encourage states to enhance their capital expenditures.
Tax Revenue: The Interim Budget estimated gross tax revenue at ₹38.31 lakh crore for 2024-25, marking an 11.46% increase from the previous fiscal year. This includes ₹21.99 lakh crore from direct taxes (personal income tax and corporate tax) and ₹16.22 lakh crore from indirect taxes (customs, excise duty, and GST).
GST Collections: GST revenue is expected to rise to Rs 10.68 lakh crore in 2024-25, reflecting an 11.6% increase. The final Budget will need to confirm these projections and provide detailed tax revenue figures.
Borrowing: The Interim Budget set the government's gross borrowing at Rs 14.13 lakh crore for the current financial year. Market observers will monitor this figure, particularly in light of the higher-than-expected dividends from the RBI and financial institutions.
Nominal GDP: India's nominal GDP growth is estimated at 10.5% for the current fiscal year, reaching Rs 327.7 trillion, as per the Interim Budget. With expectations for a normal monsoon, improved revenue collections, and increased rural consumption, there may be an upward revision in growth estimates. The RBI projects real GDP growth at 7.2% for the fiscal year.
Dividend: The Interim Budget had anticipated Rs 1.02 lakh crore in dividends from the RBI and financial institutions. However, this estimate will be revised upward following the RBI’s surplus transfer of Rs 2.11 lakh crore in May.