Budget 2024 : Biggest mistake of the Modi govt? | Complete analysis
Summary
TLDRThe 2024 Indian Union Budget, presented by the Finance Minister, focuses on employment, skilling, MSMEs, farmers, and the middle class. Criticisms include insufficient job creation strategies, increased capital gains tax, and perceived political favoritism in state allocations. The budget also emphasizes sectors like renewable energy, FMCG, and pharmaceuticals, potentially impacting related stocks.
Takeaways
- 📈 The Finance Minister of India presented the 7th consecutive Union budget for 2024-2025, focusing on four major themes: employment and skilling, MSMEs, farmers and rural development, and the middle class.
- 💼 The budget aims to facilitate employment, skilling, and opportunities for 4.1 crore youth over a 5-year period with a central outlay of 2 lakh crores, but the speaker criticizes the approach as not addressing the root issue of skill and education.
- 🏭 The government plans to incentivize job creation in manufacturing and provide support for employers creating additional employment opportunities, with a focus on improving the skill set of freshers.
- 💡 A new credit guarantee scheme for MSMEs in the manufacturing sector is introduced, along with measures to streamline credit assessment and support businesses at risk of default.
- 🌱 The budget emphasizes research and new age farming, aiming to introduce 100 new high-yielding climate-resilient varieties of 32 crops to boost agricultural output.
- 🌳 Support for natural farming is included, with plans to teach 1 crore farmers natural farming techniques and establish 10,000 research centers for necessary inputs.
- 🚗 The government is bullish on the rural economy, with increased spending on agriculture and rural development, aiming to improve infrastructure and connectivity in villages.
- 💼 The new tax regime proposes revised personal income tax slabs, potentially reducing the tax burden on salaried employees, but also increases capital gains tax, causing controversy among the middle class.
- 🏦 The budget shows a reduction in fiscal deficit and a decrease in borrowings as a percentage of revenue, indicating better financial management by the government.
- 🏛️ Special allocations for states like Andhra Pradesh and Bihar are highlighted, but there is criticism over the perceived neglect of other states like Manipur.
Q & A
What was the significance of the 7th consecutive Union budget presented by the Finance Minister of India on 23rd July 2024?
-The 7th consecutive Union budget presented on 23rd July 2024 was significant as it was the first after the elections and showcased the government's financial plan and priorities for the upcoming fiscal year. It was also notable for being the most consecutive budget speeches by any Finance Minister in India.
What are the four major themes the government focused on in the 2024 Union budget?
-The four major themes the government focused on in the 2024 Union budget are employment and skilling, MSMEs (Micro, Small and Medium Enterprises), farmers and rural development, and the middle class.
What is the government's vision for employment and skilling in the 2024 Union budget?
-The government's vision for employment and skilling in the 2024 Union budget is to facilitate employment, skilling, and opportunities for 4.1 crore youth over a 5-year period with a central outlay of 2 lakh crores.
How does the budget address the unemployment situation in India?
-The budget addresses the unemployment situation by proposing schemes for first-time job entrants, job creation in the manufacturing sector, employer-focused schemes for additional employment opportunities, and setting up working hostels to increase women's participation in the workforce.
What are the criticisms regarding the budget's approach to job creation?
-The criticisms include the argument that the budget's approach to job creation is insufficient and lacks creative ideas for generating more jobs in the economy. Critics also argue that the focus should be on skill and education rather than financial incentives.
What is the government's strategy for MSMEs in the 2024 Union budget?
-The government's strategy for MSMEs includes a credit guarantee scheme, a new assessment model for public sector banks, continued funding for MSMEs at risk of default, reducing the turnover threshold for trade receivables into cash, and setting up export hubs to facilitate international trade.
How does the budget plan to support the rural economy and farmers?
-The budget plans to support the rural economy and farmers by increasing agricultural spending, focusing on research for new age farming, promoting natural farming, providing connectivity to villages under the Pradhanmantri Gram Sadak Yojana, and introducing high-yielding climate-resilient varieties of crops.
What are the tax changes proposed in the 2024 Union budget?
-The tax changes proposed in the 2024 Union budget include revised personal income tax slabs aimed at reducing the tax burden on salaried employees, an increase in the standard deduction, and an increase in short-term and long-term capital gains tax.
What is the controversy regarding state allocations in the 2024 Union budget?
-The controversy regarding state allocations in the 2024 Union budget is the perceived political favoritism towards Andhra Pradesh and Bihar, with critics arguing that other states like Manipur, which are facing financial crises, have not received significant mention or funding.
How does the budget address the fiscal deficit and financial management of India?
-The budget addresses the fiscal deficit and financial management by reducing the fiscal deficit from 99.2% post-COVID to 4.9% in the coming year, decreasing the revenue from borrowings, and reducing the debt to GDP ratio.
What sectors are expected to benefit from the 2024 Union budget?
-Sectors expected to benefit from the 2024 Union budget include renewable energy, FMCG (Fast-Moving Consumer Goods), gold and silver companies, and the pharmaceutical industry.
Outlines
📈 Union Budget 2024: Key Themes and Criticisms
The Indian Finance Minister presented the 7th consecutive Union Budget for 2024-2025, focusing on four major themes: employment and skilling, MSMEs, farmers and rural development, and the middle class. The budget has been criticized for lacking substantial job creation strategies, favoring certain states for political gains, and causing unrest due to tax implications. It has been noted for not addressing the financial crisis in Manipur and Kerala and for the lack of significant benefits for the middle class. The budget also includes two major announcements regarding the new tax regime, which has been met with skepticism.
💼 Employment and Skilling Initiatives: Doubts and Opportunities
The budget proposes to facilitate employment, skilling, and opportunities for 4.1 crore youth with an outlay of 2 lakh crores over five years. However, the effectiveness of the budget allocation is questioned due to concerns about the skill gap in the workforce. Business owners argue that the focus should be on improving skill and education rather than financial incentives. The government's plans for upskilling 20 lakh youth in collaboration with state governments and industries are seen as a positive step towards addressing the skill gap.
🏭 Boosting MSMEs: Credit Schemes and Export Promotion
The budget showcases a comprehensive approach to support MSMEs, which are crucial to India's economy. Key measures include a credit guarantee scheme for the manufacturing sector, a new credit assessment model for public sector banks, continued funding for MSMEs at risk of default, and a reduction in the turnover threshold for trade receivables. Additionally, the government plans to set up export hubs to facilitate international trade services for MSMEs, aiming to address credit and cash flow issues.
🌾 Rural Economy and Agriculture: Increased Spending and New Initiatives
The budget allocates significant funding to the rural economy and agriculture, with a focus on research and new-age farming. The government plans to introduce 100 new high-yielding, climate-resilient crop varieties and support natural farming practices. Infrastructure development under the Pradhan Mantri Gram Sadak Yojana is also emphasized, with connectivity to be provided to 25,000 villages. However, the effectiveness of these policies will depend on their implementation.
💼 Tax Reforms: Middle Class Implications and Capital Gains Tax Hike
The budget introduces revised personal income tax slabs aimed at reducing the tax burden on salaried employees. However, the middle class expresses concern over increased capital gains taxes, which could erode profits from the stock market. The new tax regime has been criticized for leading to tax arbitrage, and the debate continues over whether the middle class will truly benefit from these changes.
🏢 Financial Management and State Allocations: Fiscal Deficit and Political Favoritism
The government's financial management is praised for reducing the fiscal deficit and decreasing the reliance on borrowings. However, the budget's political implications are highlighted by special allocations for Bihar and Andhra Pradesh, perceived as favoritism towards alliance partners. Critics argue that other states in need, such as Manipur, have been overlooked, raising questions about equitable distribution of funds.
📊 Sector-Specific Allocations: Opportunities for Growth and Investment
The budget presents opportunities for growth in specific sectors, with a focus on renewable energy, rural economy, and pharmaceuticals. Power companies, FMCG firms, and companies involved in gold and silver are expected to benefit from the budgetary allocations. The removal of customs duties on certain cancer medications and an increase in the pharmaceutical industry's production-linked incentive (PLI) scheme are also noted. However, the speaker disclaims any investment advice and encourages further research for market understanding.
Mindmap
Keywords
💡Union Budget
💡Employment and Skilling
💡MSMEs
💡Rural Development
💡Middle Class
💡Tax Regime
💡Capital Gains
💡Fiscal Deficit
💡State Allocation
💡Renewable Energy
💡Pharmaceutical Industry
Highlights
The Finance Minister of India presented her 7th consecutive Union budget for 2024-2025.
The budget has caused chaos in the country due to its implications post-elections.
The government's response to unemployment is criticized as insufficient.
Critics claim the BJP has copied policies from the Congress Manifesto.
Predictions of a slowdown in the Indian stock market due to increased capital gains.
Allegations of political favoritism towards Andra Pradesh and Bihar in the budget allocations.
Manipur and Kerala suffered a financial crisis with no significant mention in the budget.
Middle class dissatisfaction due to increased taxes.
Introduction of a new tax regime with potential negative impacts.
Kyros, an online business school, is offering scholarships and practical learning opportunities.
Four major themes of the budget: employment and skilling, MSMEs, farmers and rural development, and the middle class.
Government's vision to facilitate employment for 4.1 crore youth with a 5-year plan.
Critique of the budget's approach to skilling and education for freshers.
Announcements of new initiatives for skilling programs and educational loans.
Support for MSMEs with credit guarantee schemes and loan incentives.
Rural economy and farmer-focused allocations with increased spending on agriculture and rural development.
Tax regime revisions and debates over the benefits to the middle class.
Changes in tax slabs and rates with potential tax savings for individuals.
Increase in capital gains tax rates causing discontent among the middle class.
India's financial management improvements with reduced fiscal deficit and debt ratios.
Political allocations to states like Bihar and Andhra Pradesh amidst claims of bias.
Sectors expected to benefit from the budget, including power, FMCG, jewelry, and pharmaceuticals.
Transcripts
hi everybody on 23rd of July 2024 the
Finance Minister of India presented her
7th consecutive Union budget it is the
big day today India's Union budget is
out I present the budget for 2425 it was
her seventh consecutive budget speech
the most by any Finance Minister in this
country we need to focus on four major
curs and since it's the budget right
after the elections it has caused an
absolute chaos in the country this model
shall showcase vas b vasat b in a growth
trajectory the response of the
government is too little and will have
only little impact on the grave
unemployment situation very little in
terms of any good creative ideas when it
comes to generating more jobs in our
economy in the last 10 15 years budget
has not been for the middle class
while our ex Finance Minister P chinam
said that the BJP has copied a few
policies from the Congress Manifesto
ntin Kut has predicted a Slowdown in the
Indian stock market due to the rise of
capital gains on top of that many
ministers from various states have come
forward to say that BJP has
strategically favored Andra Pradesh and
Bihar for political gains in these
states
[Music]
at the same time while Manipur and
Kerala have suffered deep financial
crisis they haven't even got a
significant mention in the budget and
lastly the middle class seems to be
enraged because of taxes taxes and taxes
I have two announcements to make for
those opting for the new tax regime two
tax regime is a bad idea we pay taxes
when we earn money when we spend money
and even when we invest money wherever
we go whatever we do the government has
one hand in our back pocket so as usual
in this episode today we are going to
cut through the chaos and jargons to
help you break down the union budget of
2024 in such a way that in simple
language you can understand what is
bjp's strategy with this year's budget
which sectors are expected to get the
biggest boost due to this year's budget
are there any changes in tax benefit for
the taxpayers of India and most
importantly what are the biggest
criticisms of this year's
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more people the first thing that we need
to understand is the vision and major
themes that the government has touched
upon in this year's budget this year
there are four four major themes
employment and Skilling msmes farmers
and rural development and the middle
class let's start with
employment in this theme the vision of
the government is to facilitate
employment Skilling and opportunities
for 4.1 CR youth over a 5-year period
with a central outlay of 2 lakh crores
and here's where as a business owner I
feel like it's a complete waste of money
now usually you must have noticed that I
often refrain from giving my own
opinions but this time since I'm a
stakeholder in this ecosystem I will
tell you why this is useless so let's
dive in firstly we have a budget
allocated for first timers so if you're
stepping into a formal sector job for
the first time and you are registered
under the employee Provident fund
organization or epfo then under this
scheme the government will give you a
one month wage in all formal sectors in
three installments up to 15,000 rupees
this scheme is designed to benefit 2.1
CR youth all across the country number
two is job creation in manufacturing
this is an incentive for both employee
and the employer so if the employee is a
fresher in the manufacturing sector then
an incentive will be provided to both
the employe and the employer for the
first four years this incentive is again
expected to benefit 30 lakh youth
entering the workforce and then there is
employer focused scheme under this
scheme If an employer creates additional
employment opportun within a salary of 1
lakh rupees then the employers will be
reimbursed up to 3,000 rupees for 2
years towards the epfo contribution or
employee Provident fund organization
contribution and this scheme is supposed
to give reimbursement for 50 lakh new
jobs and lastly to increase women's
participation in the workforce the
government has decided to set up working
hostels in collaboration with the
industry now all of this looks fantastic
right but I'll tell you why this is
useless talk to any business owner and
they will tell you that the reason why
they don't recruit freshers is not
because they don't want to pay the
freshers but because most of the
freshers in India are useless unskilled
and unemployable so the problem is not
money it is skill and education and I
know at least a dozen business owners in
my own Circle who would happily pay a
person 6 lakh rupees perom even if she's
a Dropout the only catch over here is
that they need to have the skill set to
work at that particular job because when
you pay somebody as a business owner it
is not an expense it is an investment
because we all know that a good talent
will easily generate 200% of their
salary in revenue for the company but
the problem over here is that most of
these freshers are useless and unskilled
so this 3,000 rupees or a one month
salary up to 15,000 rupees is of no use
at all and instead of spending 2 lakh
crores into this useless scheme the
government must invest 2 lakh crores
into incentivizing colleges to either
hire high grade professors or we can use
this money to improve our institutes and
have better infrastructure so these
super skilled professors and
infrastructure together could then
impart great skills and generate a high
quality Workforce and the employment
will be a result of a high quality
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let's move on with the budget people the
government's own economic survey has
predicted that India needs at least 7.8
million jobs in the nonfarm sector over
the next 7 years to keep up with the
demo graphic changes and this budget
seems to be a direct response to it and
here's where education and upskilling
comes in and this is what I'm happy
about there are two major announcements
over here number one the government will
launch a Skilling program in
collaboration with the state governments
and the industry to upskill 20 lakh
youth over the next 5 years under this
program 1,000 industrial training
institutes will be upgraded for outcome
orientation and eventually new courses
will be introduced as per the skills
need needed in the industry secondly
more loans will be made available for
educational purposes so loans up to 7.5
lakh rupes will be given to 25,000
students each year with a guarantee from
a government promoted fund and not just
that loans up to 10 lakh Rupees will be
given for higher education in domestic
institutes this will be done in the form
of E voucher to 1 lakh students with an
annual interest subvention of 3% in
simple words what is interest subvention
you will get a 3% discount on your
interest so if the interest on your loan
is 10% you will have to pay just 7% if
this is very very clear to you let's
move on to the second theme and that is
msmes and here's where the government
has done a fantastic job in the budget
for those who don't know msmes are of
utmost importance for the economic
development of our country there are 6
CR Ms units in India employing over 11
CR people and msmes are so so important
to our economy that they account for 30%
of our GDP and 50 % of our exports but
the problem over here is that among the
64 million msmes in our country only 14%
of them have access to credit as in
loans and financing so the first scheme
for msmes is the credit guarantee scheme
under this scheme msmes in the
manufacturing sector will get term loans
for the purchase of machinery and
equipment without collateral or third
party guarantee and the entrepreneurs
who have paid back their previous loans
they will be eligible for another loan
cherry on the cake for these people who
have paid back their loans their limit
for this loan has been increased from 10
lakh Rupees to 20 lakh rupees under the
mudra loan scheme secondly to make
credit assessment process streamlined
the Finance Minister has announced a new
assessment model for public sector Banks
so public sector banks are supposed to
build in-house capabilities to assess
msmes instead of relying on third party
assessment what will this do because of
bringing this operation inhouse even
those m mmes which do not have any
formal accounting system they can be
checked for loan eligibility eventually
we can increase our credit accessibility
to more and more msmes thirdly the msmes
which are at the risk of default they
will get continued funding from the
banks even during their stress period
And this is being done with the vision
that the msme sector of India should not
struggle during Market shocks again this
is a wonderful move by the government
fourthly the turnover threshold for
converting trade receivables Into Cash
has reduced from 500 cres to 250 crores
and I know this sounds complex so I'll
explain it in simple words in simple
words if you have a company with a
turnover of 500 crores and your company
is about to get 100 crores from your
customers as receivables then you can
give the trade receivable note to the
bank and the bank will give you 100 CR
rupees today itself and the customers
will actually supposed to pay you in 3
months they will now pay the bank in the
next 3 months this is being done with
the visual that our medium skill
businesses should not face a cash crunch
while the global market is booming so
again it's a great move by the
government so earlier while this
turnover threshold was 500 crores now it
has been reduced to 250 crores so even
smaller companies with a turnover of 250
crores can take benefit of this scheme
and because of this now an additional
7,000 msmes will be able to take
advantage of this Arrangement and lastly
because msmes account for 50% % of our
exports the government wants to support
them to increase their exports even
further this is why an export Hub will
be set up all across the country to
facilitate trade and Export services for
the msmes in the international market
and this is perhaps the perfect solution
for all the pain points of the msmes
which usually revolve around lack of
credit and lack of cash flow and this
brings us to the next theme and that is
rural economy and the
farmers here if you remember there has
been a big uproar in the country that
the NDA doesn't really care about
Farmers but the truth is that this time
the budget has an extensive allocation
just for the rural economy and the
farmers if you see the budget the
agricultural spending has now increased
to 1.52 lak crores Which is higher by
11,318 crores from last year similarly
rural spending has been hiked by over
10% to 2.66 lakh crores but the question
over here is where is this money going
and how is it going to make a difference
to the rural economy well firstly the
government has focused on research and
New Age farming so in this budget the
government wants to focus on increasing
productivity and to develop climate
resilient varieties of crops for example
in India rice and wheat have been
affected because of climate change and
this is affecting the farmers income so
instead of being over reliant on wheat
and rice Farmers now need to adapt to
changing weather patterns and grow new
varieties of crops this is the reason
why the government is investing in
research to find new ways to increase
productivity and to focus on products
like millets which are climate resilient
so in this budget the Finance Minister
has announced that the government will
introduce 100 new high yiing climate
resilient varieties of 32 crops to boost
the agricultural output of India so if
Farmers switch to these crops they are
bound to benefit secondly the budget
also supports natural farming and under
this initiative 1 CR farmers will be
taught natural Farm fing and they will
be supported by certification and
branding over the next 2 years and
10,000 research centers will be
established to provide necessary inputs
for natural farming so if you or your
friends are engaged in natural farming
do check out the government websites to
see how you can benefit and when it
comes to infrastructure under the
pradhanmantri grah sadak yoga some
25,000 villages will be provided
connectivity now all of this put
together it looks fantastic on the
outside but only the implement mentation
of these policies will tell us if it is
effective or is it just another
announcement but you know what guys I am
extremely happy because rural
development and agriculture they both
have received the second and third
highest funding just after defense which
is a great thing and this means that the
government really intends to go bullish
on Rural Development so this will
automatically increase our per capita
income and it will boost the number of
taxpayers if this is clear to you let's
move on to the hottest subject of the
budget which is tax tax and tax in the
new tax regime the tax rate structure is
proposed to be revised as follows income
tax personal income tax income tax
India's Finance Minister Nala sitaraman
has announced revised personal income
tax slabs that are aimed at reducing the
tax burden on the salaried employees two
tax regime is a bad idea it will lead to
tax arbitration some taxes have also
been hiked like the long-term capital
gains tax which in fact was a surprise
move people in an effort to provide some
relief to taxpayers and to increase the
number of taxpayers in our country the
government has made some changes in the
tax Labs so if you look at our tax labs
this is what the new tax Labs look like
and here's what the revised new tax Labs
look like now the biggest debate over
here is whether the middle class is
going to benefit from this or not so
let's take an example and understand
this better let's say Shashank is a
salaried employee with an income of 20
lakhs perom here's how he's taxed in the
revised regime from 0 to three lakhs
Shashank would pay nothing from 3 to 7
lakhs he would pay 5% so it will be 5%
of 4 lakhs equal to 20,000 rupes
similarly from 7 to 10 lakhs he would
pay 10% so 10% of 3 lakhs is 30,000
rupes then from 10 to 12 lakhs he would
pay 15% which is 15% of 2 lakh rupes
equal to 30,000 rupes and then from 12
to 15 lakhs he would pay 20% % which is
20% of 3 lakhs equal to 60,000 rupes and
from 15 to 20 lakhs he would pay the
usual 30% which is 1.5 lakh rupees so in
total shashan pays 20,000 plus 30,000
plus 30,000 plus 60,000 plus 1.5 lakh
rupees which comes to 2.9 lakh rupees
and if you calculate and compare it to
the new tax regime his total tax
liability would have been 3 lakh rupees
perom so for Shashank this is a tax tax
saving of 10,000 rupees now I know that
this does not seem like a very big
amount but this is not all there is also
something called cess and search charge
so let's start with cess what is cess
cess is a tax on tax so cess is levied
by the government generally for
promoting health and education for
example sess on education is used to pay
for students midday meals or to pay the
salaries of employees in government
schools and colleges so it's a
percentage of the existing tax that you
are paying instead of the tax on the
income generated so it's called tax on
tax for example if you have an income of
1,000 rupees on which tax is 300 rupees
then CES would be 4% of 300 equal to 12
rupees so it's an added tax then we come
to deductions deductions are nothing but
tax cuts that the government gives you
if you invest your money into sectors
that are beneficial for you and the
country this includes investing in
healthcare housing retirement savings
and many more as mentioned on the the
screen so if you spend or invest money
in these instruments the government will
not tax you for that amount of money but
for the Simplicity of this example let's
take the main deduction for all salaried
employees which is standard deduction
this is a flat deduction from the total
salary earned by the employee in a
particular Financial year and this is
done to reduce the taxable income now
this limit used to be 50,000 Rupees
until last year but now it has been
increased to 75,000 rupees so now
Shashank will be taxed not at 20 lakh
rupees but at 20 lakh minus 75,000 which
comes to 19.25 lakh rupees so this
brings his tax down to 2H 67,500 rupees
from 2.9 lakh rupees and here's where we
add cess cess in India is 4% on income
tax amount so 4% Off 2 lakh 67,500
rupees plus 2H 67,500 R is equal to
10,700 plus 2 lakh 7,500 rupees equal to
2 78,2 R so if you see this is the
amount of money that Shashank has to pay
which is 2 lak 78,2 rupees and if
Shashank was earning 10 lakh Rupees then
under the new regime after the standard
deduction and cess he would be paying
54,600 rupees but under the revised
regime it would be4 24,200 R so that's a
difference of 10,400 R and if his income
is 15 lakh rupes then he would be paying
1ak 45,600 rupes under the new regime
and just 1.3 lakh rupes under the
revised regime that's again a difference
of 15,600 rupees so this way without
counting says on an average the revised
tax regime is likely to save 17,500
rupees per person per year this is a
perspective of the pro government
opinion but the argument over here is
that even though this tax has been
reduced the capital gains has actually
been increased for those who don't know
capital gains again it's pretty simple
if you buy a stock for 10,000 rupees and
you sell it in the same year at 12,000
rupees you will incur a short-term
capital gains on this 2,000 rupes of
profit that you have generated and if
you sell the stock after 1 year then you
will incur a long-term capital gain tax
on this 2,000 Rupees of profit and when
it comes to other assets like house land
gold and silver here's a table that
tells us the exact holding period for
the asset to qualify for short-term
capital gains and for long-term capital
gains and in this year's budget the
short-term capital gains has been
increased from 15% to 20% and long-term
capital gains has been increased from
10% to
12.5% this is one of the reasons why the
middle class of India is extremely angry
because while the government is meagerly
reducing the income tax these capital
gains taxes will then erode The Profit
that the Indian middle class could
generate in the stock market of India
and and because there is no right or
wrong in this you tell me in the
comments if you find this to be better
or worse for you this is the second part
of the budget which is taxes and the
middle class appro if this is very clear
to you let's come to a very very
critical part of the budget which is
India's financial management here's why
ladies and gentlemen again the
government has done a fantastic job in
the past 5 years if you see this graph
our fiscal deficit is reducing from
99.2% postco to just 4.9 9% in the
coming year for those who don't know the
meaning of fiscal deficit is very simple
if the government generates 100 rupes in
tax and non tax revenue but spends 120
rupees then this 20 rupees of extra
spending needs to be funded through
bonds and Loans so this 20 Rupees is
called fiscal deficit so if your GDP is
200 cror and deficit is 20 crores then
fiscal deficit as a percentage of GDP is
20 divided 200 into 100 which is 10%
so the lesser the fiscal deficit the
better it is for the country and if you
look at the numbers in 2021 our economy
was in a disastrous State our fiscal
deficit shot up to
99.2% but now we are reaching an amazing
figure of just 4.9% which is excellent
ideally this number is supposed to be 3%
of our GDP but we're getting closer and
closer secondly the biggest source of
revenue for the government is borrowings
so 27% of our Revenue comes from just
borrowings now although this sounds
sounds scary on the outside what you
need to know is that last year this
number was 34% so we have significantly
reduced our revenue from borrowings
because of which it's a great thing for
our country similarly if you look at
other numbers our debt to GDP ratio has
gone down from 89% in 2021 to 81% in
2024 similarly our external debt to GDP
ratio has gone down from 21.2% in 2021
to 18.7% in 2024 so we are doing a great
job with managing our finances if this
is very clear to you let's come to the
next and perhaps the most important
political part of the budget which is
about State allocation and here's where
the appr is about Andhra Pradesh and
Bihar getting a political benefit due to
the BJP favoring its Alliance the budget
made special allocations of Bihar and
Andra Pradesh Andra Pradesh chief
minister Chandra Babu naidu's dream
project of building a new capital for
the state amarati got a major boost the
government has proposed 26,000 crors for
various Road projects in biar and 21,000
crores have been reserved for power
projects opposition ranks across the
party actually lebl this an attempt to
save the
government I think this budget should be
called to tell you about it here's what
the government has proposed for Andra
Pradesh up to 15,000 crores will will
support multilateral funding for Andhra
Pradesh New Capital which is in line
with the Andra Pradesh reorganization
act secondly financing will be provided
to complete the poam irrigation project
which is crucial for the state and its
Farmers thirdly grants will be given to
the backward regions of Andra Pradesh to
reduce disparities and promote balanced
growth and lastly funds will be
allocated for infrastructure such as
water power Railways and roads in key
industrial areas of Andhra Pradesh which
will help the vishakapatnam Chennai
Industrial Corridor and the Hyderabad
bangaluru industrial Corridor similarly
in Bihar 26,000 crores will be allocated
for road projects 21,000 crores will be
year marked for power projects and the
government votes to support Temple
economies in multiple areas all across
Bihar on top of that the central
government will Aid in developing an
industrial node at GAA which is a part
of the Amritsar Kolkata industrial
coridor and lastly the government will
expedite the request from Bihar for
external assistance from the multi
lateral development Banks so is this
good absolutely yes there is no problem
with the center allocating funds for
Bihar and Andra Pradesh at all because
it is after all our own people who will
benefit from it however critics point
out that while Bihar and Andra Pradesh
have been given preference Manipur is
also struggling a lot due to violence
and communal unrest and this has been
happening for the past 1 1 and a half
years but even then there was nothing
significant for Manipur now the argument
here is that NDA is doing this to favor
the their alliance with nitish Kumar in
Bihar and Chandra Babu Naidu in Andra
Pradesh so while it is great that these
states are getting funding it is equally
important to give special allocations
for States like Manipur which is
currently in a pathetic condition if
this is very very clear to you let's
come to the macro part of the budget
which is about the sectors that the
government is bullish on and why is this
important it is important because the
government is the Godfather of the
market and if they are bullish on some
sectors the companies in these sectors
will see a massive growth including your
own company if you are in one of these
sectors so this is a wealth of
opportunity that the government is
presenting to yourself in the form of
budget allocation so the question over
here is which are the companies and
sectors that will benefit from this
budget and which are the stocks that you
need to put on your watch list but
before we move on with the segment guys
I just have to let you know that I am
not a se- registered investment adviser
and nothing of what I'm telling you is
an investment advice everything is meant
to be used for educational purposes only
this is because I believe that one of
the best ways to do market research
about a particular industry is to study
the public listed companies to study the
annual reports and see how these stock
Ms are happening because these stock
movements are cues to help you
understand the waves in the market if
this is clear to you let's move ahead
people the first set of companies that
are expected to benefit from this budget
are the power companies because
renewable energy is a key theme in the
budget and the government is very
bullish to meet the target of 5 500 gaw
renewable energy capacity by 2030 so
6,250 crores of government money is
going into suar mu BG scheme so keep an
eye on solar stocks like Vari adani
green energy and insulation energy and
more importantly if you're in the Solar
industry do keep an eye on your value
chain so that you can understand the
opportunities in the value chain better
and then cater to those opportunities in
such a way that eventually you can gain
more profit from it moving on secondly
since the government is spending a lot
on the rural economy of India it is
expected to raise the income of poor and
middle class eventually it would
increase consumption and then benefit
the fmcg companies of India so keep an
eye on ITC and godr consumers thirdly we
saw a reduction in customs duty on gold
and silver which is again expected to
benefit companies like Titan truan Das
beamg zavi and senko gold India and
lastly the government has removed custom
duties from three cancer medications and
they've increased the pl on Pharm
matical industry from 1,200 crores last
year to
2,143 crores this year so keep an eye on
companies like astrazenica India Sia and
Sun Pharma these are the most important
points that we believe were the
highlights of the budget so long story
short firstly employment allocation to
me seems like a waste of money but when
it comes to budget allocation for
Education Loans those are great secondly
msme allocation is absolutely amazing
and it is the need of the hour third
thirdly when it comes to taxes you tell
me if you find it to be better or worse
and when it comes to capital gains
according to me it's definitely not a
good thing fourthly allocation for
Andhra Pradesh and Bihar is not a
problem at all but the ignorance of
other states like Manipur is a big big
problem especially Manipur because this
state has gone through horrendous times
in the past one and a half years and
when it comes to budget allocation for
sectors I don't have the necessary
qualification or expertise to comment on
it so here's where I would just trust
the government and they in tank because
they know their job better this is what
we have to say about the highlights of
the budget of
2024 for the rest of the information I
will attach docs in the description so
that you can educate yourself and
understand the budget better that's all
from my side of today guys if you learn
something viable please make sure to hit
the like button in aut make guy Baba
happy and for more such insightful
business and political case studies
please subscribe to our Channel thank
you so much for watching I will see you
in the next one bye-bye
n
[Music]
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