Key Focus Areas in Nirmala Sitharaman’s Historic 7th Budget

Finance Minister Nirmala Sitharaman’s seventh budget will spotlight housing, taxation, green energy, and job creation. Key reforms anticipated in July 2024.

Housing Sector: A Push for Affordable Living

As Finance Minister Nirmala Sitharaman prepares to present the Union budget for the seventh consecutive time in July 2024, significant attention is on the affordable housing sector. Following the BJP-led NDA government’s return to power, Prime Minister Narendra Modi’s administration announced its goal to aid three crore more rural and urban households in building homes under the Pradhan Mantri Awas Yojana (PMAY). This initiative is seen as a major boost for affordable housing.

Industry experts suggest that lowering costs associated with approvals, stamp duties, and development premiums could further stimulate growth in this sector. Additionally, there’s a call to revise the definition of affordable housing to account for inflation’s impact on raw material prices and overall construction costs. Expanding this definition would potentially allow more people to qualify for affordable housing, thereby increasing inclusivity.

Taxation Reforms: Simplifying and Streamlining

Taxation is another key area under scrutiny. With the advent of a new tax regime offering lower tax slabs but without exemptions, many believe that the government might eventually phase out the older regime, which, while offering higher tax slabs, includes various exemptions. This shift could become more likely if the new regime gains widespread acceptance.

Market watchers are also paying close attention to discussions around the securities transaction tax on futures and options trades, which gained significant interest during the vote on account in February. These potential changes reflect a broader aim to streamline and simplify the tax system, making it more accessible and less cumbersome for taxpayers.

Green Energy: Incentives for Sustainable Growth

The green energy sector is poised to receive a significant focus in the upcoming budget. With increasing power demand due to soaring temperatures, there is widespread anticipation for reforms aimed at providing long-term investments in sustainable energy. Market participants expect incentives and subsidies that will foster growth in this sector, helping to meet the country’s escalating energy needs while promoting environmental sustainability.

Job Creation: Expanding Opportunities

Job creation remains a priority for the government. Extending the production-linked incentive (PLI) scheme to additional sectors is seen as a potential strategy to boost employment, particularly in manufacturing and other labor-intensive industries. Furthermore, there is a growing expectation for initiatives aimed at enhancing income levels for women, thus supporting gender equality in the workforce.

In summary, Finance Minister Nirmala Sitharaman’s seventh budget presentation is expected to address these crucial areas—housing, taxation, green energy, and job creation—each playing a vital role in shaping India’s economic landscape for the coming years.