New Delhi: Finance Minister Nirmala Sitharaman will be presenting the Interim Budget for 2024-25 on Thursday, gaining significance ahead of the April-May general elections. The Finance Ministry's 10-year review projects a close to 7% GDP growth for 2024-25, eyeing a $5 trillion economy in three years and a potential $7 trillion by 2030.
ObserveNow Media interacted with the BFSI Industry experts on their predictions and expectations on the upcoming budget. Below mentioned are the views expressed by the experts on the upcoming budget:
Radhika Pandey, Associate Professor, National Institute of Public Finance and Policy
“I think the budget will be guided by the government's commitment to achieving the medium-term fiscal consolidation roadmap. The government would try to achieve a fiscal deficit of 4.5 percent of GDP by 2025-26. Towards this goal, in the next fiscal i.e. FY 25, the government would try to limit its deficit to 5.2-5.3 percent of GDP. The other economic indicator would be the public capex. The government would try to maintain its focus on capex in the upcoming budget as well albeit at a slower pace.”
The budget will maintain its focus on supporting the rural and the agricultural sector (latter through enhanced cash handouts to farmers and raising the allocation for agricultural credit). In addition, emphasis will also be on addressing the challenges faced by youth, women and the poor. In addition, low cost housing could get impetus as it has the potential to support the poor and generate employment opportunities, further added Pandey.
Karan Purohit, Vice President & Head of Legal Claims, Magma HDI General Insurance Co. Ltd.
“Considering the economic encounters, we strongly have a belief that the budget for 2024-25 may serve as a remarkable opportunity to bridge the gap in the insurance sector and augmentation of the overall growth. Keeping in view of the same, the expectation is to offer an increase in the investment in the sector of the insurance.”
It is also expected that the significance of the tax benefits in expanding the insurance sector's limits. Recommendation as to have changed in section 80C of the present IT Act that may allow a higher cap for insurance premium payments incentivizing more & more masses to invest in insurance products and enjoy tax benefits, added Purohit.
Pradhan Mantri Jan-Dhan Yojana (PMJDY) is the National Mission for Financial Inclusion to ensure access to financial services, namely, basic savings & deposit accounts, remittance, credit, insurance, and pension affordably. Under the scheme, a basic savings bank deposit (BSBD) account can be opened in any bank branch or Business Correspondent (Bank Mitra) outlet, by persons not having any other account.
Sudin Baraokar, AI and Digital Transformation Advisor and Expert
“From a BFSI Sector perspective the focus on Financial Inclusion and leverage of the Half a billion JAN Dhan accounts must continue. Small Loans backed with Central Government guarantees must be scaled up to help over 60 million MSME’s, Entrepreneurs and Startups. The cost of Credit must gradually come down so that Industries can keep making investments to help achieve higher growth. Finally, the massive BFSI Digital Infrastructure channels in the form of Payments, Lending, and OnBoarding must connect with over a billion citizens and make available mission critical Financial inclusion services.”
Debopam Chaudhuri, Chief Economist, Piramal Enterprises Limited
“India has largely been a capital deficit nation, our financial system is overly dependent on commercial banks, especially public sector banks, even after 75 years of independence. Hence it is important to undertake fiscal policies that are aimed at easing the supply of capital by further diversifying its supply.”
Reforms should aim at increased participation from other stakeholders including insurance companies, mutual funds, pension funds, and NBFCs. The next 25 years will witness a sharp rise in demand for credit augmented by rapid technological strides being made through India Stack. Hence a large number of capital and credit providers need to be activated to meet this demand”, concluded Chaudhuri.
In the lead-up to the Interim Budget 2024-25, experts foresee a strategic focus on fiscal consolidation, innovative solutions in the insurance sector, and capital diversification to propel India towards a $7 trillion economy by 2030. The upcoming budget stands as a pivotal opportunity to bridge gaps, support key sectors, and drive comprehensive financial inclusion for sustained economic growth.
Stay tuned with ObserveNow for the live coverage of Budget 2024-25 on all our social media handles.