Budget 2023-24 Preview - Capex To Remain At Centre Stage: ICICI Direct

ICICI Direct Report

Union Budget for FY23-24 is likely to bring back the focus on fiscal consolidation after being fiscally expansionary to support growth recovery post the Covid-19 induced pandemic. We expect fiscal deficit at 5.8% for FY24 from 6.4% as budgeted in FY23.

Overall focus will, however, continue on the growth agenda via higher capex allocation that will accelerate the investment cycle and employment.

The buoyancy in tax revenues is expected to normalise in FY24 and likely be a tad above gross domestic product growth at 11.6%. While growth in gross tax revenue is likely to moderate, the subsidy outlay is likely to also reduce significantly.

Subsidy towards food, fertiliser and petroleum, which had increased substantially in last three years to come down sharply. For FY24, it is expected at 1.3% of GDP versus 2.2% in FY23.

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