Interim Budget 2024: Highlights

The Interim budget 2024 has allocated ₹90,171 crore towards the healthcare sector. The allocation is a marked change from last year’s budget estimates of ₹89,155 crore.

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Presented by Finance Minister Nirmala Sitharaman on February 1st, the Budgeted Estimate (BE) for the education sector for the financial year 2024-25 (FY25) is ₹1,24,638. There is an increment in the BE for education from FY23 and FY24, where the BE was ₹1,04,278 crore and ₹1,12,899 crore respectively.

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The Union Budget for FY 2024-2025 allocates ₹502 crore to the Regional Connectivity Scheme (RCS), a decrease from last year's ₹1,244 crore. The RCS aims to enhance connectivity, especially in remote areas, and stimulate growth in the aviation sector. Despite challenges like limited industry capacity and fuel price surges, the government remains committed to RCS-UDAN's viability. The allocation will focus on reviving airports and initiating operations on 100 RCS routes. While the interim budget sets the tone, anticipation surrounds the full-year budget post-elections for a clearer view of allocations and plans.

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• India’s benchmark indices – NIFTY50 (-0.1%) and Sensex (-0.15%) – closed with mild losses on the Interim budget day.

• Out of the NIFTY50 space, 31 stocks declined. Weakness in L&T, Bharti Airtel and Bajaj Finance pushed the markets lower.

• Budget-sensitive sectors close mixed, with NIFTY Bank (+0.4%), NIFTY PSU Bank (+3.1%) being top gainers, while NIFTY Realty (+0.9%) closed in red as there was no big ticket announcement with regards to real estate sector.

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• Shares of the airlines operator, Interglobe Aviation closed 3.5% higher today after FM Nirmala Sitharaman mentioned about significant growth witnessed in the aviation sector.

• FM said The number of operational airports has doubled to 149, while 517 additional routes connecting tier-2 and tier-3 cities have been established. Due to this significant infrastructure growth, Indian airline operators have proactively ordered more than 1000 new aircraft.

• Key growth indicators like surge in aircraft fleet size, passenger traffic growth, infrastructure development have prompted investments in modernisation and capacity enhancement projects in the aviation sector.

• As a result, following the budget conclusion, Interglobe Aviation stock saw strong traction and closed in green.

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No changes related to tax rates

• The salaried class looks forward to the income tax relief announcement in every budget. However, this time, the government kept tax slabs unchanged as the Finance Minister opted to continue with existing tax slabs.

• FM Nirmala Sitharaman kept the tax slab rates unchanged for new and old income tax regimes. The individual taxpayers eagerly awaited income tax reforms amid elevated inflationary pressures and recessionary undertones in major world economies.

Leave travel allowance (LTA) benefit

• The budget speech focused on developing tourism hubs in India through the development of port connectivity, tourism infrastructure, and amenities on islands, including Lakshadweep. This, in turn, is expected to benefit employees claiming LTA or leave travel allowance.

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Finance Minister Niramala Sitharaman presented the last budget before the general election in May 2024. Here are key takeaways

• No changes related to tax rates. Retain tax rates for direct and indirect taxes. This means post-tax return economics stands unchanged across asset classes for investors.

• Fiscal deficit at 5.1%, adhering to the path of fiscal consolidation. Net borrowing of ₹11.75 lakh crore for FY25. As per market experts, this is positive for bond markets

• Capital spending for 2024-25 has been raised 11% to ₹11.11 lakh crore, or 3.4% of GDP. Meanwhile, The government aims to raise ₹50,000 crore from stake sales in various public sector companies in 2024-25.

• Budget allocation for Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme remains unchanged at ₹86,000 crore. Meanwhile, the Ministry of Road Transport and Highways has received higher allocation by 2.8% ₹2.78 lakh crore for 2024-25.

• The Interim Budget brought no cheer to home loan borrowers. There was no announcement on raising the existing home loan interest deduction limit of ₹2 lakh per annum.

• Indian benchmark indices – NIFTY50 (-0.05%) and SENSEX (+0.01%) – are trading flat after finance minister Nirmala Sitharaman presented the Interim Budget 2024. Out of the NIFTY50 pack, 30 stocks are in the red.

• On the sectoral front, NIFTY Auto (+0.9%), NIFTY PSU Bank (+0.8%), NIFTY FMCG (+0.7%) are among top gainers, while NIFTY Realty (-1.1%), NIFTY Metal (-0.8%) are top losers.

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• Introduction of updated IT returns, new form 26AS and pre-filing of tax returns have made filing simpler and easier

• Average processing time has been reduced from 93 days in 2014 to 10 days this year, thereby making refunds faster.

• No changes related to tax rates. Retain tax rates for direct, indirect taxes

• Withdrawal of pre-FY10 tax disputes demands of up to ₹25,000

• The target is to reduce fiscal deficit to below 4.5% by FY26

• FY25 net market borrowing seen at ₹11.75 lakh crore

• Total expenditure: ₹47.66 lakh crores

• Tax receipts: ₹26.02 lakh crores

• Fiscal deficit in 2024-25 is estimated to be 5.1% of GDP, adhering to the path of fiscal consolidation

• FY25 divestment target at ₹50,000 crore

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