We are a few days away from what’s usually one of the most discussed events of the year – the Union Budget. Most of us eagerly wait for February to know about the changes in income tax rates, tax breaks, or subsidies, as these changes will directly affect our wallets. But it’s also a good time to know about the government’s plans in terms of its expenditures and revenue.
Since it’s the election year, Finance Minister Nirmala Sitharaman will present an Interim Budget on 1 February, as the complete Budget for FY2024-25 will be unveiled around July after the new government is formed. Here are the key highlights that experts, market observers, and investors expect this year.
Focus on the Healthcare Sector
- Advanced Medical Facilities Beyond Metros: One of the expectations for the Indian healthcare sector is that it will address challenges, improve accessibility, and ensure affordable care for all. There’s hope for advanced facilities, infrastructure, and resources to go beyond major cities and reach smaller towns and villages. This will need increased budgetary allocation and innovative solutions like telemedicine and mobile clinics.
- Better Trained Medical Staff: The COVID-19 pandemic reminded us how critically we need a well-trained and equipped healthcare workforce. Thus, the sector also hopes for an allocation of resources for medical education, training, and development programs. Investing in our doctors, nurses, and other healthcare professionals is an investment in the nation’s health.
- Health Insurance Reforms: Experts also emphasize revamping health insurance as another key area. Incentivizing preventive healthcare measures and reforming health insurance to encourage preventative health checks and early interventions can save lives and reduce long-term healthcare costs.
- Patient Awareness & Education: Another expectation is patient awareness and education so people can stop being misinformed and gain the proper knowledge for informed decision-making and improved health outcomes. This calls for allocating resources for patient education initiatives and tools to facilitate clear communication between patients and healthcare providers.
- GST Relief for a More Efficient System: Streamlining healthcare-related taxes can make the sector more efficient. Experts also call for GST relief on medical equipment and tools for better doctor-patient communication. Such measures can reduce costs, improve access, and benefit patients and healthcare providers.
- A Collaborative Vision for Health: Budget 2024 is an opportunity for the government to partner with the private sector in building a sturdy healthcare ecosystem. Specialists from the industry are also hoping for a collaborative effort between the government and private healthcare entities. Through innovative public-private partnerships and targeted investments, we can achieve the shared goal of a healthier and more equitable India.
According to a poll report, the Budget may also focus on these areas.
Infrastructure Investment
The government will likely continue prioritizing capital expenditure, especially infrastructure. While the increase may be slower compared to recent years, it will still significantly boost the infrastructure sector.
Investment Information and Credit Rating Agency (ICRA) has stated in its pre-budget analysis that the Indian Government may allocate ₹10.2 lakh crore for capital expenditure in the upcoming fiscal year (FY25). This represents a slower growth of about 10% compared to the over 20% expansion each year since the pandemic. This slowdown may have some impact on economic activity and overall GDP growth.
Job Creation
To create jobs in rural areas, the Budget might offer incentives for rural infrastructure development and expand production-linked incentive (PLI) schemes to sectors like chemicals and services. This could stimulate manufacturing and demand for labor.
Fiscal Deficit Reduction
Despite the upcoming elections, the government might aim to reduce the fiscal deficit further, potentially reaching 5.3% of GDP. This commitment to fiscal responsibility shows a focus on long-term economic stability.
Increased Social Sector Funding
The government is also considering increasing funding for social programs due to better tax revenue collections. Income and corporate tax receipts have crossed previous estimates by approximately ₹1 lakh crore during the current fiscal year. This extra tax revenue will allow the government to dedicate more resources to social welfare initiatives.
Boosting Consumption
The Budget might include measures to increase consumer demand to support the agricultural sector. This could be important to address the expected slowdown in agricultural growth, which may reach 1.8% in the current fiscal year compared to 4% in 2022-23. This prediction is based on preliminary estimates of the country’s Gross Domestic Product (GDP).
Overall, the interim Budget will likely focus on maintaining economic growth, creating jobs, managing the fiscal deficit, supporting social welfare, and revitalizing the agricultural sector. According to experts and poll predictions, the healthcare, social, agriculture, and infrastructure sectors may see healthy growth this year.
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