Capital Ideas Forbes India

The Union Budget for FY24 focused on capex-led growth, improving the quality of government spending, and providing a fiscal consolidation path. The budget was presented on 1 February, by finance minister Nirmala Sitharaman, against a crucial macro-political backdrop, with an expected slowdown in global growth, a smaller nominal GDP buffer and ahead of the general elections in 2024. Navigating the growth paradox amid an increasingly volatile global backdrop remains a key challenge for the government this year. But, what if growth slows down further in FY24, due to recession in developed markets and the lagged impact of tighter monetary policy?  Although the Economic Survey projected a nominal GDP growth of 11 percent YoY in FY24, the Budget assumed 10.5 percent nominal GDP growth next year. So, are the budget numbers overly optimistic? What will be the big implications of the Union Budget FY24? To understand that, Forbes India's Nasrin Sultana is joined by Radhika Rao, Senior Economist, DBS Group.

In the last full year Budget before Prime Minister Narendra Modi seeks a third term, the government has announced a slew of measures aimed at appeasing India's middle class.

The finance minister Nirmala Sitharaman proposed various changes in the new tax regime to make it more popular. Out of five major announcements made under personal tax, proposals have been made for salaried individuals opting for new tax regime, change in tax slab rates and introduction of standard deduction. But the new math looks complex and puzzling, leaving a trail of chaos among tax payers trying to understand how will the new taxation structure benefit.

So, to understand and simplify these new taxation proposals that will come into effect from 1 April 2023, Forbes India's Nasrin Sultana is joined by Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax, KPMG in India.

At a critical juncture of steep valuations and high volatility in stock markets, comes the Union Budget 2023. However, an analysis of the past trends shows that the Union Budget's influence on short-term market performance is declining. Budget day volatility has risen since 2019 and hit an eleven-year high in 2022. Expectations, as measured by pre-budget equity markets performance, are important in determining what the markets do immediately after the budget.

Only twice in 30 years have the Indian markets risen both pre- and post-budget. Factors that will likely have the maximum impact on markets, this year, include a credible fiscal deficit target, the government's spending plans vs. fiscal consolidation, and changes to long-term capital gains tax.

So, what are the odds for markets this year? What are priced in and what are not? What do stock markets want from the Union Budget 2023? What are long-term bets in markets beyond the Budget?

To discuss that and get to the pulse of Indian markets, Fores India's Nasrin Sultana in conversation with Abhiram Eleswarapu, Head of India Equity, BNP Paribas.



You can listen to other podcasts in the series right here - https://open.spotify.com/show/06JalaGoQsfdLXHedmBlRH

Simplification of taxation and tariff structure, bringing parity in the tax rates, identifying sunrise industries for tax exemptions, lowering tax burden in capital markets and ease in compliance are some top of the list expectations from Finance Minister Nirmal Sitharaman in the Union Budget 2023.  The government is expected to specifically focus on new-age industries such as e-commerce, start-ups and fintechs while critical sectors like infrastructure and healthcare may also continue to be on the radar.

So, is there any scope for further cuts in corporate tax? How can the government make the new tax regime attractive?  What about taxation benefits for MSMEs and PLI schemes?

Forbes India’s Nasrin Sultana speaks to Neeru Ahuja, Partner, Deloitte India to decode and simplify this over-complex tax structure.

The government of India will present its fiscal year 2024 Budget on February 1. This will be the final full-year Union Budget under the current government before the general elections in mid 2024, and comes at a time when the government is trying to weigh spending priorities, without compromising on fiscal prudence and the inflation target. It will be a tight ropewalk for the government to balance populist measures reining in reforms to boost investments. FY24 is a  busy political calendar with several important state elections in Karnataka, MP, Rajasthan and Chhattisgarh.

With India running one of the highest public debt to GDP ratios among emerging markets, firm adherence to the fiscal consolidation would seem  to be the most appropriate path for the government.

Fiscal consolidation, reforms and growth are some of the key factors markets will be looking out in the Union Budget 2023.  Is the FY23 budget math more challenging than meets the eye? What are likely to be the spending priorities in FY24? How much fiscal consolidation is likely in FY24?

To decode and simplify this fiscal puzzle, Forbes India's Nasrin Sultana speaks to Rahul Bajoria, MD and Head of Emerging Markets Asia Economies  Ex-China), Barclays.

The founder and chairman of IIFL Group believes that the government will focus on revival of economic growth and creation of jobs in the coming year. Jain thinks last year it had to take a one-time large hit on revenue expenditure due to the sudden second wave; it went up from 1.5% of GDP to 2.3% of GDP due to higher allocation towards subsidies. Jain says while the government will incur a shortfall when it comes to its ambitious divestment target of Rs 1.75 lakh crore, a lot of ground has been covered for assets to be sold in the coming financial year, which will provide money for expenditures.

On inflation, which has been a cause of concern globally, and with the US Fed indicating a rate hike, Jain believes that the writing is on the wall and it will impact emerging markets and all risky assets across the globe. “We should prepare for a corrective phase in the stock markets.” In this podcast, he also cautions new age investors who have less appetite, to completely avoid startup companies which are still in the price discovery phase