Budget 2024: Who are the gainers, who took a hit

With the vote-on-account speech, Nirmala Sitharaman left some with cheer, while others are optimistic about the full budget after the new government is formed.

The Prime Minister Narendra Modi-led Union government presented the vote-on-account, or the interim Budget, on Thursday ahead of the 2024 Lok Sabha elections and in a boost to housing, renewable energy adoptions and tourism, Union finance minister Nirmala Sitharaman announced a slew of fiscal measures.

:People watch Union Budget at an electronic showroom. (Photo by Bachchan Kumar/ HT PHOTO)

However, despite a surge in announcements of developmental projects, including the launch of several flagship Vande Bharat trains, the government fell short of meeting its last year's capital expenditure target of ₹10 lakh crore – the capex stands at ₹9.5 lakh crore, as per the data for Revised Estimates. However, the finance minister took another optimistic approach by topping the capex up with an 11.1% spike and promising to spend ₹11.11 lakh crore for the next fiscal year.

The government fared slightly well in the fiscal deficit target, turning it down to 5.8%, as opposed to the expert prediction of 5.9%. Next year, the government aims to bring it down to 5.1%.

This Budget also defied the widespread expectation of major tax overhauls, given the upcoming general election – a move away from bringing radical changes during a time of economic flamboyance.

The interim budget is presented to meet the government's fiscal obligations during the election year until the new government is formed.

Here is a list of gainers and losers in the 2024 interim Budget:

Gainers

Middle class

The government announced a housing scheme for people living in rented homes, slums or unauthorised colonies. This scheme will enable them to buy or build their own houses in line with the government's ‘housing for all’ drive. Sitharaman has announced a 66% increase to ₹79,000 crore under the Pradhan Mantri Awas Yojana for the financial year 2024.

Farmers

Although the Union ministry of agriculture and farmers' welfare received the lowest of allocations, the government has set its target to promote private and public investments in post-harvest activities.

Sitharaman said during her budgetary speech that the government will expand the use of revolutionary Nano Urea, a sustainable and nanotechnology-based agri input that ensures smart farming and combatting climate change.

Tourism

In a major push for tourism, Sitharaman announced that the government will provide interest-free loans to states to promote tourism. Amid recent diplomatic tensions between India and Maldives, she said the government will give undivided attention to Lakshadweep to boost tourism in the Union Territory.

Losers

Disinvestment

Disinvestment is one of the key practices by the government to reduce fiscal deficit. However, after making a fallback in high-ticket sales of some stakes, the government has revised its disinvestment target to ₹300 billion of capital receipts by FY 2024, as opposed to an earlier target of ₹510 billion. Next FY, the government hopes to gain ₹500 billion.

Jewellers

The jewellery and gems industry was hopeful for a progressive fiscal policy primarily focusing on reduced customs duties and boosting consumer spending through tax incentives. The government left the import tax at a high level of 15%.

Electric vehicles

The government said it will expand and strengthen the adoption of electric vehicles in the form of public transport networks. It will also boost the development of public charging infrastructure. However, the government has taken a regressive approach towards the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) scheme and cut its budget by 44% for FY 2025. Meanwhile, Sitharaman did not mention a revamped FAME III scheme for FY 2024 in her speech.

Infrastructure

As India targets to become a $5 trillion economy by the next three years and $7 trillion by 2030, the 11.1% increase in capex from ₹10 lakh crore to ₹11.1 lakh crore is considered moderate. The market experts believe there should be a more substantial increase in the investment, given the challenges of “deteriorating infrastructure".