Union Budget 2024: Focus on Welfare, Deposit Incentives - Care Ratings

Mumbai, Jul 16 (PTI) Higher outgoes on welfare schemes to support the sagging consumption growth will be among the key focus areas in the Union budget to be presented next week, a domestic rating agency said on Tuesday.

The budget will look at pushing consumption through higher allocation for the rural economy, welfare schemes and agriculture, Care Ratings said.

Welfare schemes may get a higher allocation in the budget, it said, specifying that there can be a Rs 75,000 crore rise in revenue expenditure compared to the allocation in the interim budget presented earlier this year.

The government is expected to undertake higher allocations on employment guarantee programmes, PM Awas Yojana, PM Gram Sadak Yojana, PM Kisan Samman Nidhi and schemes related to labour-intensive small businesses, the agency said.

Despite the higher outgoes on welfare, the government will be able to trim the fiscal deficit target to 5 per cent for FY25 from 5.1 per cent in the interim budget, it added.

With the wedge between deposit and credit growth continuing to be wide, the budget may look at ways to incentivise deposit mobilisation for banks, it noted.

The rating agency said that despite the higher allocation on welfare schemes, the long-standing focus on capital expenditure is expected to continue, and the government will retain the Rs 11 lakh crore spending commitment.

Focussing on job creation, the budget will also come out with more measures on the productivity-linked incentives (PLI) scheme front by increasing allocations or including more labour-intensive sectors like textiles, leather, footwear and toys, it said.

The agency also pitched for a focus on "big ticket" divestments, pointing out that there is a potential to raise up to Rs 11.5 lakh crore, assuming the government retains a 51 per cent stake in all state-owned companies.