Make in India push or tax relief? Nirmala Sitharaman to present Union Budget today

Nirmala Sitharaman will present her seventh consecutive budget with the middle class expecting her to announce tax relief.

Also Read: Indian economy needs to generate close to 7.85 million jobs annually until 2030 in the non-farm sector, shows Economic Survey

In a bid to satisfy allies, the government is expected to maintain its focus on slashing fiscal deficit while also cutting taxes and increasing welfare spending.

Economic Survey projects India's real GDP to grow between 6.5 to 7 percent in 2024-25

India’s real GDP is projected to grow between 6.5–7 per cent in 2024-25, said the Economic Survey presented by Nirmala Sitharaman in the parliament.

The Survey points out that the domestic growth drivers have supported economic growth in FY24 despite uncertain global economic performance. It also adds that during the decade ending FY20, India grew at an average annual rate of 6.6 per cent, more or less reflecting the long-run growth prospects of the economy.

The Economic Survey says that India’s economy showed resilience to a gamut of global and external challenges as real GDP grew by 8.2 percent in FY 24, exceeding 8 percent mark in three out of four quarters of FY 24, driven by stable consumption demand and steadily improving investment demand.

Job Creation

The Economic Survey 2023-24 noted that Indian economy needs to generate an average of nearly 78.5 lakh jobs annually until 2030 in the non-farm sector to cater to the rising workforce.

According to NITI Aayog’s indicative estimates based on national labour force survey data, in 2020–21, 77 lakh (7.7 million) workers were engaged in the gig economy and as per the Economic Survey 2023-24, the gig workforce is expected to expand to 2.35 crore (23.5 million) and form 6.7 per cent per cent of the non-agricultural workforce or 4.1 per cent of the total livelihood in India by 2029–30.

What did the survey tell about tax?

The growth in gross tax revenue (GTR) was estimated to be 13.4 per cent in FY24, translating into tax revenue buoyancy of 1.4. The growth was led by a 15.8 per cent growth in direct taxes and a 10.6 per cent increase in indirect taxes over FY23.

The Survey adds that broadly, 55 per cent of GTR accrued from direct taxes and the remaining 45 per cent from indirect taxes. The increase in indirect taxes in FY24 was mainly driven by a 12.7 per cent growth in GST collection. The increase in GST collection and E-way bill generation reflects increased compliance over time.