Union Budget 2024 | Path towards fiscal prudence likely to continue, says Deepak Jasani of HDFC Securities

Deepak Jasani outlining his macro vision for the upcoming 2024 budget under Modi 3.0, said that the forthcoming Union Budget could continue the roadmap laid out in the previous Budgets barring a small course correction.

As Finance Minister Nirmala Sitharaman gears up to present her seventh budget in a row - five annual budget and one interim budget as of February 2024 - in less than a week's time, various industries and sectors are talking about their expectations from the Budget 2024.

Deepak Jasani, Head of Retail Research at HDFC securities, outlining his macro vision for the upcoming 2024 budget under Modi 3.0, said that the forthcoming Union Budget could continue the roadmap laid out in the previous Budgets barring a small course correction. Although he does not expect any sizeable correction in the markets before the Budget, he said the correction post that may be short-lived unless impacted by some other trigger.

He also added while this budget is likely to shun the race of competitive populism through handouts, the government is unlikely to abandon the path of fiscal prudence.

"While there exists a fear among investors about the probability of the Govt turning populist in the Budget post the recent poll outcome, we feel that the recent announcements of ministerial appointments and modest MSP hikes negates such a fear. The government is likely to shun the race of competitive populism through handouts and is not likely to abandon the path of fiscal prudence although it may make extra efforts to win over a larger population of rural and urban poor by incurring targeted social welfare spends," Deepak Jasani said.

It was reported earlier that Prime Minister Narendra Modi-led government may face troubles this time with pressure mounting to accommodate the wishes of his alliance partners JD(U) chief Nitish Kumar and TDP supremo Chandrababu Naidu, it is more likely that the Budget will be a feel-good one, coming on the back of the Rs 2.11 lakh crore record dividend to the union government from the RBI. 

Deepak Jasani feels that this additional receipt from the RBI could be used to i) cut the fiscal deficit target to 5.0 per cent for FY25 from 5.1 per cent in the interim Budget thus reinforcing the inclination to stick to fiscal consolidation; ii) make higher transfers to states for capex spend iii) increase transfer under PM KISAN from Rs 6000 p.a. to Rs 7500 p.a. iv) provide incentive to income tax payers to shift to the new tax regime by providing higher standard and other deductions/higher exemption limit/changes in tax slabs.

Union Budget 2024 | Making a record for any Finance Minister, Nirmala Sitharaman will be presenting her 7th Union Budget on July 23, 2024 under the Modi 3.0 government. While inflation has burnt a hole in the pockets of 'aam janata', will this Budget spell relief for Indians? Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.