Sonal Varma believes the government will meet its fiscal deficit targets for FY24 and FY25 through offsetting factors and a slight slowdown in capex growth. For FY24, higher direct tax collections and dividends have been positive, while lower indirect tax collections and disinvestment proceeds have been negative. In FY25, Varma expects the government to set a deficit target of 5.3% of GDP based on assumptions of nominal growth and a slowdown in capex growth.
Interim Budget Expectations: The ailing tea industry in Assam is hoping for proper promotion and export improvement in the upcoming Union interim budget. The industry is facing oversupply in the domestic market and tepid export demand. The Bharatiya Chai Parishad has also urged state government to reduce the industry s social cost burden. India is the fourth-largest tea exporter and contributes 23% to global tea output.
There are expectations that the budget will focus on the inclusion of policy changes, provide higher allocations to areas that expedite the implementation of reforms, and permit the inclusion of diverse funding avenues.
The budget exercise should allocate more funds to improve the judicial system and address infrastructure constraints. Support is needed for National Law Schools and institutions like OP Jindal to prevent brain drain. Flexibility for Indian private fund managers is necessary to encourage offshore financing for Indian start-ups. Tax hurdles in share swap structures and court mergers hinder rescue transactions for start-ups.