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Exploring the Key Focus Areas in the Union Budget Under Modi 3.0 Government

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The upcoming Union Budget, which will be presented on July 23, is likely to be a monumental event. Narendra Modi is the only second prime minister after Jawaharlal Nehru to be elected for three straight terms to the office. Therefore, people are expecting something special from the budget of the Modi 3.0 government.

When the finance minister Nirmala Sitharaman presents the budget, people will expect her to give a boost to areas like job creation, rural economy, infrastructure development, healthcare, agriculture, education, and environment.

Will the budget be people-friendly? It's tough to say.  However, this is the first budget of this government and therefore it is expected to lay down the government’s vision for the next five years.

Read this blog because it explains what the government’s approach will be regarding the sector-wise allocation of Budget 2024. Besides, the blog also throws light on the likely impact of the Union Budget 2024 on different sectors in the economy.

Introduction

The upcoming Union Budget has two key points that make it interesting. First, India has a high public debt, so it will be hard for the finance minister to make people-friendly announcements. Second, this is the first budget of the Modi 3.0 government. With the next elections five years away, there's less pressure to make popular moves, so we can expect a budget focused on the long-term vision for the economy.

India has already seen tremendous improvement in its infrastructure. This budget is expected to give a further boost to this sector. The rural economy is facing distress due to unemployment and rising prices. The government is likely to address these concerns.

Moreover, the government is expected to continue its focus on digital transformation and skill development of youth.

Infrastructure Development and Economic Growth

The Union Budget 2024 is likely to propel economic growth by focusing on the development of infrastructure in the country. Here is what is expected from the budget when it comes to infrastructure development:

  • The central government may increase the allocations for the Road Transport and Highways Ministry.
  • A substantial increase is expected in private sector investments for road construction projects.
  • If the government increases its allocation to the Road Transport and Highways Ministry, it will give a boost to the construction of highways.
  • As per a few reports, certain allies of the government have demanded a higher limit for borrowing for infrastructural projects. If that happens, the infrastructure sector will further get a boost.
  • Meanwhile, the apex industry body – ASSOCHAM – has suggested to the government to improve investments in many sectors related to infrastructure, like transportation, water supply, digital infrastructure, and energy.

#BudgetSimpleHai

The 2024 Union Budget is likely to be presented on 23rd July and is expected to include announcements on policies, schemes, income tax rate slabs, and more.

To simplify this year’s Budget and to decode its impact on your life, your investment portfolio, and all that you do, Bajaj Broking brings you #BudgetSimpleHai!

Join us on our website or head over to any of our social handles to get the latest updates on the Union Budget as it happens. Read in-depth reports, watch videos, and get a clear understanding of what’s in store.

Kyunki Bajaj Broking ke saath, #BudgetSimpleHai

Healthcare and Social Welfare Reforms

In the Union Budget 2024, healthcare and social welfare sectors may also see some amends. Find below the key expectations in this regard:

  • It is expected that the government will double the number of beneficiaries under its flagship scheme – Ayushman Bharat Health Insurance Scheme.
  • All people aged above 70 are likely to be covered by this scheme.
  • Besides, the insurance coverage of people is expected to be increased to Rs. 10 lakhs a year.
  • If these expectations materialise, the flagship scheme will provide health cover to more than 2/3rd population of the country. Wouldn’t that be great?
  • Regarding social welfare, the government’s focus areas are likely to be providing support to marginalised communities and giving a boost to inclusive growth.
  • Many states in India are focusing on welfare schemes by providing economic and other support to women and needy sections of society. The central government, too, is likely to increase its focus on social welfare through this budget.
  • The BJP does not have a majority in Lok Sabha on its own and is running a coalition government. Besides, the rural economy continues to remain stressed with issues like inflation and unemployment. Due to these reasons, the government is likely to pay attention to social welfare.

Agriculture and Rural Development

Agriculture and rural development are at the heart of the Indian economy. As the rural economy is facing distress, the Finance Minister is likely to announce some relief measures for this sector, including the following:

  • The budget may increase the target for agricultural loans by 25% in FY 2024-25.
  • Food inflation has been very high in recent months. Therefore, it is expected that the government will give a boost to agricultural infrastructure so that the production of key crops can be increased.
  • The government could also consider increasing subsidies for rural housing.
  • Hiking subsidies on rural housing is a part of a larger plan of Prime Minister Narendra Modi’s government. Under this plan, the government is trying to improve spending on rural infrastructure through village roads, besides focusing on a jobs programme meant for rural people.
  • Young people in rural India do not have sufficient alternatives to find employment, apart from agriculture and low-skill manufacturing jobs. Therefore, the government should prioritise creating high value-add jobs for them, which will also improve the rural economy.

Education and Skill Development Initiatives

India's spending on education has room for growth. While our educational institutions are improving, there is still significant potential for further advancement. The upcoming budget may focus on the following key areas from this viewpoint:

  • The budget is expected to address the issue of skill gap. Currently, there is a huge gap between the skill sets of our youth and the skills required by the industry.
  • The government must announce measures to prepare youth for Industry 4.0, which is aimed at integrating manufacturing and industrial processes with digital technologies.
  • While the penetration of digital technologies has increased in India, there is still a digital divide between urban and rural India, which affects the skill level of youth in rural areas. The government is likely to announce measures to bridge the digital divide.
  • Then, the budget’s focus is expected to be on higher education institutions, where students enrol to develop their practical skills. The outcomes of programs run by such institutions should be aligned with the requirements of the industry.
  • In the interim budget earlier this year, the finance minister had proposed setting up more medical colleges. Therefore, it is expected that the budget will continue its focus on this aspect.

Digital Transformation and Innovation

In the last ten years, India has really focused on its digital transformation through innovations. That’s the reason that millions of financial transactions are made every day in the country using digital technologies. It is expected that the government will continue this drive through the following measures in the Union Budget:

  • If India wants to become a $5 trillion economy soon, the focus should be on improving digital public infrastructure. Therefore, the budget is likely to emphasise on this area.
  • Technologies like fintech can give a boost to financial inclusion not only at an individual level but also at an enterprise level. Through the budget, the government is likely to promote the fintech industry.
  • If the fintech industry is promoted, it can transform rural areas through a number of financial and digital solutions.
  • As more financial transactions are happening online than earlier, the government is also going to focus on making online transactions safer. This will make our financial system more robust.
  • The budget is likely to focus on areas such as blockchain, cybersecurity, and artificial intelligence.

Environment and Sustainability Initiatives

As climate change has become a reality, environment-related concerns have taken centre stage worldwide. Therefore, the government is expected to focus on such concerns in the upcoming budget.

  • There is a possibility that the government may reduce the goods-and-services-tax (GST) rate on solar devices, which will give a push to the adoption of solar energy and also manufacturing of such devices in India.
  • Currently, the government provides support to only new investments in the electric vehicles (EVs) space. However, in the upcoming budget, the government may announce support for even those automotive manufacturers that have already invested in the EV space.
  • The government could even consider providing tax incentives to hybrid vehicles, which will further give a push to green energy.

Conclusion

If you are an investor about to open a demat account, the above discussion gives you an idea of the likely impact of Union Budget 2024 on different sectors. In India, sectors like infrastructure, education, healthcare, agriculture, and digital transformation depend a lot on government policy, which is laid down in the budget. This budget is likely to provide a boost to these sectors. Overall, it is going to formulate a vision for the Indian economy and where the country should be in the next five years.

To learn more about what’s in store at this year’s Union Budget, head over to any of our social handles (look for @BajajBroking on your favourite platform). We are simplifying the stories that are likely to have the biggest impact on your year and your investment portfolio. Because with Bajaj Broking, #BudgetSimpleHai.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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Frequently Asked Questions

What are likely to be the main economic priorities of the Modi 3.0 government in the Union Budget?

Answer Field

These are expected to be the main priorities of the Modi 3.0 government in the Union Budget: infrastructure development, healthcare, agriculture, rural development, skill development, and digital transformation.

How is the Modi 3.0 government expected to address infrastructure development in the Union Budget?

Answer Field

The government could increase allocations for the road ministry, which will give a boost to road construction projects. The budget is also likely to make announcements to support sectors like transportation, water supply, digital infrastructure, and energy.

What healthcare reforms and initiatives are likely to be included in the Union Budget under Modi 3.0?

Answer Field

The government is likely to double the number of beneficiaries under the Ayushman Bharat Health Insurance Scheme. Everyone over the age of 70 is expected to be covered by this scheme. Moreover, the insurance coverage of people may be increased to Rs. 10 lakhs a year.

What measures are the Modi 3.0 government expected to propose for agricultural growth and rural development?

Answer Field

The target for agricultural loans may be increased by 25% in the budget for FY 2024-25. The government may give a boost to agricultural infrastructure to increase the production of key crops.

How is the Union Budget under Modi 3.0 going to focus on education and skill development?

Answer Field

The hot topic of the digital divide between rural and urban India is likely to be addressed by the budget. Taking a cue from the interim budget earlier this year, the government may announce the setting up of more medical colleges. The budget is expected to focus on higher education as well.

What environmental and sustainability initiatives are expected to be a part of the Union Budget under Modi 3.0?

Answer Field

The budget may announce support for those automotive manufacturers that have already invested in the EV space. Currently, the support is only for those manufacturers who are making fresh investments. Tax incentives may be proposed for hybrid vehicles in the budget.

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