10 things to know before Nirmala Sitharaman unveils her record 7th Budget

At 11 am on Tuesday, July 23, Finance Minister Nirmala Sitharaman will make history by presenting her seventh Union Budget in Parliament. It marks the first Union Budget of the Narendra Modi 3.0 government, following their return to power for a third consecutive term after the 2024 general election. All eyes will be on the Finance Minister as she delivers her Budget speech, unveiling the government's fiscal policy for the upcoming year, encapsulated in her ‘bahi khata’—a traditional red cloth-bound ledger introduced by Sitharaman herself to carry the Budget documents.

The Budget is poised to outline the economic contours for the entire nation, impacting policymakers, businesses, taxpayers, senior citizens, and the common man alike. It is eagerly anticipated for its implications across various sectors and facets of the economy.

Here are 10 key things to know before the much-anticipated unveiling of the first Union Budget of the Modi 3.0 administration on July 23: 

1. GDP Growth: The Budget 2024 comes at a time when the country has finished FY24 with GDP growth of 8.2 per cent, with the RBI projecting economic expansion in the current financial year at 7.2 per cent. According to the Economic Survey, tabled by the finance minister in Parliament on July 22, GDP growth is forecast to be at 6.5-7 per cent in FY25. 

2. Several economists have exuded confidence that the country’s GDP growth is likely to surpass the projections laid out in the Economic Survey, hoping for steps aimed at unlocking the country's growth potential in the upcoming Budget.

3. All Eyes on Fiscal Roadmap: Economists will keenly look out for the government’s take on the fiscal deficit – or the difference between a government's total revenue and total expenditure in a given year, containing which is crucial for maintaining fiscal discipline while promoting sustainable economic growth and ensuring macroeconomic stability. As per Interim Budget 2024, the fiscal deficit is pegged at 5.1 per cent of GDP in FY25, 80 bps below the actual reading of the previous fiscal year and much lower than a simple average of 7.5 per cent recorded in the past three years. 

4. Market Borrowings: The February Budget pegs gross and net market borrowings at Rs 14.13 lakh crore and Rs 11.75 lakh crore in FY25, respectively. Restraining market borrowings helps in maintaining fiscal discipline, say economists.

5. Sectoral Allocations: Allocations to big-ticket sectors will be in the spotlight. In Interim Budget 2024, Rs 2.55 lakh crore is earmarked for the railway sector, Rs 6.21 lakh crore for defence, and Rs 2.78 lakh crore for roads and highways. 

6. Income Tax Sops: Every Budget drives hopes for some relief in the form of income tax sops, and the upcoming Budget is no different. This time, income tax assessees widely expect an increase in the deduction limit to Rs 1.5 lakh per financial year under Section 80C of the Income Tax Act, a doubling of the standard deduction from Rs 50,000 to Rs 1 lakh, and an increase in the basic limit under the new regime from Rs 3 lakh to Rs 5 lakh, according to Zee Business research.

7. Infrastructure to Remain in the Spotlight: The government is widely expected to remain focused on its infrastructure push, on top of a record capex of Rs 11.1 lakh crore capex for infra in Interim Budget, significantly surpassing an existing high of Rs 10 lakh crore in FY24. The government has already identified three major economic railway corridor programmes under its PM Gati Shakti scheme, in a bid to improve logistics efficiency and reduce costs: Energy, mineral & cement corridors, port connectivity corridors, and high traffic density corridors. In Interim Budget 2024, it announced the transformation of 40,000 regular rail bogies to Vande Bharat standards.

8. Housing for All: Interim Budget 2024 mentioned that the government is on track to achieve its goal of covering three crore houses under the PM Awas (Grameen) scheme despite COVID challenges. 

9. Green Energy in Focus: The government has set a goal of taking the country’s coal gasification and liquefaction capacity to 100 MT by 2030. 

10. ‘Viksit Bharat’ Outlay: Economists will also track the central government’s milestone-linked reforms in the States for its ambitious ‘Viksit Bharat’ vision. Interim Budget 2024 includes a provision of Rs 75,000 crore as 50-year, interest-free loans to support these reforms by the state governments.