India budget shifts spending priorities while keeping fiscal deficit in check
By Kripa Jayaram and Vineet Sachdev
MUMBAI, July 23 (Reuters) -India struck a balance between greater spending on jobs and rural development as well as transferring more funds to states, while narrowing the fiscal deficit, the 2024-25 budget unveiled on Tuesday showed.
The budget comes on the heels of last month's election setback in which Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) returned to power only with the help of allies.
The government expects the economy to grow at 10.5% in nominal terms, which includes inflation, in 2024-25, with inflation-adjusted real growth seen at between 6.5-7%.
It lowered its fiscal deficit target for the fiscal year to 4.9% of GDP, from the 5.1% target set in the interim budget in February and 5.6% in the previous year.
It lowered its gross borrowing target to 14.01 trillion rupees ($167.40 billion), said it still plans to spend a record 11.11 trillion rupees on longer-term infrastructure and marginally raised its revenue expenditure, which includes more near-term spending.
Overall the government's spending has risen a modest 1.2% since February to 48.2 trillion rupees.
The sharpest increase, of 12.6%, was in funds transferred to states, including to the BJP allies-ruled states of Andhra Pradesh and Bihar.
Spending on home affairs, urban development and agriculture also rose compared to estimates in the interim budget.
While the government spoke of increased focus on jobs and rural areas, spending on its flagship schemes rose only marginally due to an increase in funds for the affordable housing scheme.
Money allocated to the rural employment guarantee scheme was flat.
The government's tax collection estimates were largely unchanged, with net earnings from tax revenues at 25.8 trillion rupees.
Non-tax revenues rose significantly due to a large $25 billion surplus transfer from the central bank earlier this year.
Outside of budget allocations, the government raised the tax rate on capital gains from equity investments and also increased the levy on derivative trading.
Since their COVID-19 lows in March 2020, India's stock indexes have surged more than 200% each, which India's chief economic advisor flagged as a risk in a report released ahead of the budget.
Retail investors have also jumped into the riskiest corners of the market and now account for 41% of overall derivative trading volumes, compared with just 2% in 2018.
The government also provided some tax relief to low-income consumers, by raising the minimum income limit beyond which tax is imposed.
It also widened the income band which attracts the lowest tax rate.
($1 = 83.6900 Indian rupees)
India budget: 2024-25 snapshot https://reut.rs/4fg7WrS
Where the money will go? https://reut.rs/4cOxdYo
Where did the money come from? https://reut.rs/46jRO4E
India_major_schemes https://reut.rs/3SlBTwF
India Budget: Market capitalisation of Indian stock markets has risen sharply India Budget: Market capitalisation of Indian stock markets has risen sharply https://reut.rs/3A2alGf
Derivatives trading in India https://reut.rs/3Wzxb15
India Budget: Tax paid by various income slabs https://reut.rs/4bXbQD8
Reporting by Kripa Jayaram and Vineet Sachdev; writing by Ira Dugal; Editing by Savio D'Souza
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.
