Budget 2024 Impact: Winners and Losers In Nirmala Sitharaman's Interim Budget

The interim budget, presented before the Lok Sabha polls, aimed to resonate with crucial voter groups like farmers and the impoverished while adhering to fiscal responsibility.

Measures to enhance tourism, housing, and renewable energy adoption were announced by Finance Minister Nirmala Sitharaman.

Photo Credit: PTI

However, the allocated spending for roads, ports, and airports in the world's fastest-growing major economy fell short of expectations. Bonds experienced a rally due to her plan to reduce market borrowings, while stocks saw a decline.

"The next five years will witness unprecedented development and golden moments to realize the dream of a developed India by 2047," she stated. A comprehensive budget will be presented by the new government following the elections in April and May.

PM Modi, with his increasing popularity after recent state election victories and the inauguration of the Ram Temple in Ayodhya, is well-positioned to extend his decade in power.

Let's deep dive and take a look at some of the winners and losers of the interim budget:

WINNERS

Agriculture

In agriculture, the promotion of private and public investments in post-harvest activities, including modern storage and supply chains, is being planned. There is also a focus on boosting self-reliance in oilseeds, with a comprehensive program for the development of dairy farmers, along with increased spending on fisheries to enhance sector productivity.

Middle Class

For the middle class, the government has raised the threshold limits for tax rates for individuals, aiming to provide more disposable income to taxpayers and stimulate consumption. Financial aid has been extended to the middle class residing in rented houses, slums, or unauthorized colonies to facilitate the purchase or construction of their own homes.

Tourism

In the tourism sector, the government is set to encourage states to develop tourist centres and promote them on a global scale. Additionally, there are plans to provide long-term interest-free loans to states for tourism development.

Renewable Energy

Regarding renewable energy, the government announced viability gap funding for harnessing wind energy potential, starting with an initial capacity of 1 gigawatt. However, this fell short of industry expectations, particularly in light of India's goal to achieve net carbon zero by 2070. The renewable energy industry anticipated more details on the funding mechanism for these programs.

LOSERS

Infrastructure

A modest increase of 11.1% in infrastructure outlay was outlined in the budget, bringing the proposed expenditure to 11.1 trillion rupees in the next financial year. The challenges of deteriorating infrastructure were noted, with the suggestion that a more substantial increase in investment must be considered, as stated by Pradeep Gupta, vice chairman of Anand Rathi Group.

Electric Vehicles

The expansion and strengthening of the electric vehicle ecosystem are being planned by the government through measures such as the development of public charging infrastructure and the broader adoption of electric public transport. However, the $1.2 billion subsidy program ending in March was not extended.

Jewellers

Thursday witnessed a decline in jewellery stocks, including those of Tata Group's Titan Co., Kalyan Jewellers India Ltd., and Senco Gold, as the import tax on gold was left unchanged at a high level of 15% by the government. The industry, aiming to curb illegal inflows into the country and boost demand by making the precious metal more affordable for consumers, has repeatedly sought a reduction in the tax. Almost all the gold consumed in India is imported.

Disinvestment

The disinvestment target for the current fiscal year has been slashed by India after encountering challenges in concluding some high-ticket stake sales. An expectation of 300 billion rupees from disinvestment in the year through March 2024 has been revised down from the earlier target of 510 billion rupees. The goal for the next year has been set at 500 billion rupees.