The Union Budget for FY24 carried forward the strategy of prioritizing investment-driven economic growth while continuing with fiscal consolidation. Accordingly, capital expenditure is budgeted to rise significantly by ~33% in FY24 over the FY23 Budgeted Estimate (3.3% of GDP). Meanwhile, revenue expenditure is projected to increase modestly given the rationalization of subsidies and other relief measures. Furthermore, the budget also announced rationalization of tax slabs under the new tax regime and higher rebates which is likely to boost personal consumption. The fiscal deficit was retained at 6.4% of GDP in FY23 and is projected to narrow to 5.9% of GDP in FY24. In order to finance the deficit in FY24, the central government has planned a gross borrowing of Rs 15.43 lakh crores, keeping its reliance on market borrowings at elevated levels.
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