51% citizens surveyed rate Budget 2024 as meeting/exceeding expectations while 49% rate it below expectations

July 23, 2024, New Delhi: Finance Minister Nirmala Sitharaman in her seventh consecutive budget has identified nine key areas for generating employment and better income in the hands of working people, both in urban and rural areas, with a major thrust entrepreneurship. The key areas identified in the 2024-25 union budget are Productivity and Resilience in Agriculture, Employment and Skilling, Inclusive Human Resource Development and Social Justice, Manufacturing and Service, Urban Development, Energy Security, Infrastructure, Innovation, Research and Development and Next Generation Reforms.

Sitharaman announced allocating INR 11,11,111 crore towards capital expenditure, which is 3.4% of the GDP. Enumerating it as a policy prerogative towards investment in infrastructure by central government, the finance minister stated that significant investments made in previous years have triggered a multiplier effect. All the incentives and push to create infrastructure and employment are something to look forward to but the expectation of the average taxpayer to be able to save more has been belied. For the salaried class, the budget offers only a hike in the standard deduction to INR 75,000, from INR 50,000 under the new income tax regime in FY25. However, Sitharaman announced a review of the Income Tax Act, stating that the government is working towards a simpler taxing regime. She clarified that it is too early to say whether the old tax regime will be removed.

The finance minister has proposed new tax structures for charities, foreign shipping companies, rationalisation of capital gains. These steps have been planned because the government wants more investments. The finance minister has also reduced corporate tax on foreign companies from 40% to 35% to attract more investments. As a step to curb black money and encourage investment in new enterprises, the new budget has announced plans of abolishing angel tax for all classes of investors in startups.

What is bound to upset investors is that while Long Term Capital Gains Tax (LTCG) on property sales has been reduced from 20% to 12.5%, the budget fine print however reveals that the indexation benefit on real estate has been removed and will result in higher tax outflows for sellers. The finance minister has proposed hiking the LTCG on all financial and non-financial to 12.5% from the current 10%. On the other hand, short-term capital gains tax (STCG) on some assets is to attract a tax rate of 20% from 15% currently, while that on all other financial assets and all non-financial assets shall continue to attract the applicable tax rate.

Through a survey, LocalCircles has sought to gauge the mood of the public to the latest budget presented in Parliament on July 23. Over 16,000 responses were received from citizens located in 227 districts of India. 69% respondents were men while 31% respondents were women. 44% respondents were from tier 1, 26% from tier 2 and 30% respondents were from tier 3 and 4 districts.

51% citizens surveyed rate Budget 2024 as meeting or exceeding expectations; 49% rate it as below expectations

The survey first asked, “How do you rate Budget 2024 on an overall basis?” Out of 8,832 who responded to the question 20% stated “far below expectations”; 29% stated “below expectations”; however, 33% of respondents stated that it “met expectations”; 9% stated it was “above expectations” and 9% stated it was “far above expectations”. To sum up, 51% of citizens surveyed rate Budget 2024 as meeting or exceeding expectations; 49% rate it as below expectations.

Skilling and employment generation along with new infrastructure development are the top areas in which citizens see Budget 2024 driving value for India

The survey further asked citizens, “What is the top benefit according to you that Budget 2024 is likely to drive for India?” Out of 7,979 who responded to the question 25% stated that it will “Will create new infrastructure”;40% are optimistic that it “will boost consumer spending”; 5% stated that it “will spur innovation”; 5% stated it “will boost agriculture productivity”; and 5% stated it “will have benefits other than the ones listed above”. However, the remaining 20% of respondents stated the “budget will do none of the above”. To sum up, Skilling and employment generation along with new infrastructure development are the top areas in which citizens see Budget 2024 driving value for India.

In summary, the citizen response to the new budget by the BJP led coalition government shows that there are mixed feelings as while 51% of citizens surveyed rate Budget 2024 as meeting or exceeding expectations; 49% rate it as below expectations. Similarly, while there are expectations that skilling and employment generation along with new infrastructure development are some of the areas where citizens see hope in the new budget, 1 in 5 respondents see no value in the Budget. Given the mixed response of the citizens, the Government must ensure that they begin the implementation of some of these programs at the earliest so the benefits can start reaching the masses quickly.

Survey Demographics

Over 16,000 responses were received from citizens located in 227 districts of India. 69% respondents were men while 31% respondents were women. 44% respondents were from tier 1, 26% from tier 2 and 30% respondents were from tier 3 and 4 districts. The survey was conducted via LocalCircles platform and all participants were validated citizens who had to be registered with LocalCircles to participate in this survey.