Finance Minister Nirmala Sitharaman is set to present Narendra Modi’s government interim budget on 1 February 2024, just months before the 2024 Lok Sabha elections. What will be the focus of Union Budget 2024? The budget presented will be for vote-on-account, which means that no major announcements will be made. The consolidated budget for 2024 will be announced after the results of the elections are declared.
Will the budget offer tax breaks and incentives to revive consumer spending and boost retail footfall? Experts expect Union Budget 2024 to offer tax breaks and incentives to revive consumer spending and boost retail footfall. Suggestions include raising personal income tax slabs, temporary tax holidays, and incentives for automobile purchases, travel bookings, restaurant dining, and housing.
What industry experts expect out of Union Budget 2024
“Pent-up demand and legions of revenge shoppers drove brisk recovery in retail and consumer spending so far. However, inflation remains a persistent thorn that threatens to derail the rebound. Raising personal income tax slabs and hiking standard deductions to offset inflation can put more disposable income in the hands of shoppers,” said Ridhima Kansal, director of Rosemoore.
Further, temporary tax holidays and incentives around automobile purchases, travel bookings, restaurant dining, and housing can catalyze consumer spending across key sectors, she added.
“GST contributed over ₹1.5 lakh crore monthly to the kitty last quarter, underscoring consumption resilience. However, we are far from pre-pandemic peaks. Introducing mechanisms like electronic GST invoices can enable quicker refunds to prevent working capital from getting locked up,” said Tejpal Singh Shekhawat, founder & CEO of Kalyanam Furniture .
Additionally, rationalizing peak slab rates and bringing petroleum under the GST ambit could make the regime more consumer-friendly, added Tejpal.
Retail inflation crossed the 6% mark towards the end of last year. The rapid rise in household budget spending on food, fuel, and EMIs leaves little surplus for discretionary shopping or leisure. Income tax rate cuts seem unlikely given fiscal challenges.
However, enhancing standard deduction and leave travel allowance limits can assist middle-class taxpayers. Providing higher tax incentives on first-time home loans and electric vehicles can also spur major purchase decisions and multiplier, said Raghunandan Saraf, Founder and CEO of Saraf Furniture.
Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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