If you are wondering about the impact of the Budget 2024 on your personal finances or contemplating the potential opportunities hidden in the fine print – this article is your window into the intricate world of budgetary dynamics.
As the Interim Budget 2024 is set to be announced on February 1, the anticipation resonates within the financial sectors and among the common taxpayers. StockGro’s CEO Ajay Lakhotia shared his perspective on the upcoming budget, dissecting its impact on the average citizen’s financial journey. Lakhotia also debunked myths around the budget, connecting the dots between budgetary decisions and the daily essentials that form the fabric of our lives.
In the following excerpts, the founder elucidates the essence of the budget, demystifying its complexities and sheds light on crucial areas to watch. If you are curious about how the upcoming budget will shape the financial landscape and, in turn, affect you, then dive right in.
Q. How true is the perception that a budget means nothing for the common man?
Ajay Lakhotia: Nahi, aisa nahi hai (No, it’s not true). Think about this – what are the three most important things in our life – first, roti (food), second, kapda (clothes), and third, makaan (shelter). And then there are more important things – Instagram profile, number of followers, number of likes. So, anything that impacts this should be important to us.
With the budget, all the influencers will now be posting, and the like count and followers will increase.
But let’s look at more real things – budget also influences everything from how much we pay for groceries and fuel for our cars to how much taxes we pay and, more importantly, how much subsidies each industry gets.
So, it is very important for every common man to understand the budget’s impact on them.
Q. What is the budget?
Ajay Lakhotia: Think of the Indian Government as the largest venture capitalist deciding where to invest the capital for the long term. In fact, it is the largest investor in the economy – redistributing the capital to the sectors for economic growth. In short, every year, the government plans its financial goals by trying to balance its income and investments. For every ₹100 that the government earns, about ₹15 comes from income tax, another ₹34 comes from borrowings, ₹17 comes from GST, and about ₹12 comes from other sources. From this 18 percent goes to States for planning their expenses, 20 percent goes on interest repayments on the borrowings, and after other expense approximately 17 percent is what is left with the central government for their own schemes.
Q. Doesn’t this seem more like spending than earning?
Ajay Lakhotia: That is true. In most of the fast-growing economies like India, the revenue is often less than the expenditure leading to what we call a deficit situation, or in our startup language, we call it the cash burn at the end of the year i.e. your spend is more than your income. But in recent years, the government has done an excellent job in reducing this deficit, reaching almost break even.
Q. So what should we be tracking in this budget?
Ajay Lakhotia: First and foremost, tax reforms. Any changes in the slabs of the tax rate which would have a direct impact on one – savings, second – investments, and third – your own spending patterns.
Secondly, we should very closely track the savings schemes. The Mahila Samman Savings Certificate, which was announced last year, gave women a 7.5 per cent interest rate on their savings.
Next, you must watch out for any changes in the GST rates which may make some of our pending purchases more expensive, say electronics, cars, and travel. But more importantly, track the sectors that the government is trying to promote through incentives and subsidies because this is where all our investment opportunities are hidden.
Q. How do you suggest the common man should navigate the complexities of the budget before planning their investments?
Ajay Lakhotia: Before planning your investments you must analyse the sectors, pick the right stocks, and then test your strategies. Sounds like hard work, but luckily StockGro is already doing it for you. We are making the budget insights so simple that every common man and woman would be able to relate to it and use it for their benefit. You can enjoy all these benefits and more on the StockGro app without paying anything.
Disclaimer: This article was originally published on HT media.
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