Budget 2024 Expectations: Increased tax buoyancy, as reflected in both income and GST monthly collection date will ensure headroom for the government to spend more on farmers and social sector schemes in the upcoming interim budget without compromising with fiscal responsibility. In the intervening budget, which will be a major economic document by the Modi 2.0 Demonstration before the general elections concerns of poorer sections especially issues in rural areas are likely to get priority focus
Sources say collections from income and corporate taxes have been rising buoyantly in the present fiscal, and total direct tax mop-up is set to outdo budget estimates by little more than Rs 1 lakh crore.
The government had planned to collect Rs 18.23 lakh crore through direct taxes this year. The mop-up as of January 10 stood at Rs. On the GST side, central GST revenues are likely to exceed its budget estimates of Rs 8.1 lakh crore by about Rs 10,000 crore.
However, according to various estimates about Rs 49000 crore will be deficit this fiscal year in excise and customs duties collections the Centre’s gross tax revenues are likely to exceed Budget targets of Rs 33.6 crores by a whopping amount of around 60000 crore.
ICRA, in its interim budget expectations report, had projected that gross tax revenues to grow 11 % of the Union Budget 2024-25 would be driven by direct taxes and GST collections with excise duty collection likely remaining subdued.
With ICRA’s nominal GDP growth forecast of 9.5 percent, tax buoyancy is assumed at a healthy 1.2 in FY2025, in line with the historical average seen during FY2015-19,” ICRA said.
The tax buoyancy has given the government space to spend more on social sector schemes such as MGNREGA, rural roads, PM-Kisan Samman Nidhi, and Prime Minister Vishwakarma Yojana while remaining on track of fiscal consolidation with a lowering level of fiscal deficit by 4.5 percent in 2025
For the fiscal year, it is estimated that 5.9 percent of the GDP deficit will represent a difference between receipts and expenditures by the government during this period
Deloitte India Partner Sanjay Kumar noted that currently, the government has a certain amount of fiscal room and would like to use it. No profligacy has ever been exhibited by this government.
During the COVID period when other countries were giving money in the hands of poor people, this government continued to strictly follow the transferring rule and we are getting good dividends out of that. Why change color at this time hitherto pragmatically did it so far? The government’s size Budget for the current year was Rs 40 lakh crore, which is likely to increase by about ten percent in the next fiscal to Rs 43-44 lakh crores.
Kumar said, “The allocation for infrastructure and women-centric schemes is expected to increase in the 2024-25 interim budget.
