Indian Government preparing for big-bang Union Budget in July

NEW DELHI : Confident of coming back to power after the Lok Sabha elections, the Narendra Modi-led BJP Government is preparing for a big-bang July union budget, with major announcements lined up.

“India is the pilot that will take the global flight to new heights in the next five years, which would be years of unprecedented growth and prosperity. That is Modi’s guarantee,” said Prime Minister Shri Narendra Modi at the Network18 Rising Bharat Summit on March 20.

The government is preparing a roadmap for the next 25 years, and drawing up plans for the first 100 days of the BJP’s third term in power, Modi added.

“The government did not use its gunpowder in the interim union budget. This government is assured that they are coming back to power. The July union budget will be a big-bang affair. People should be ready for a whole lot of announcements,” a senior government official told.

The new government will announce the union budget for the full year in July 2024. On February 1 this year, the government announced the interim budget till the new government comes in place.

What is the government likely to focus on in the July budget?

Decriminalisation provisions: the government’s priority will be to further decriminalise certain key provisions in the laws to boost the ease of doing business. A working group, including officials from the NITI Aayog, finance ministry, RBI, the commerce ministry, etc., are holding inter-ministerial meetings to shortlist the provisions that can be further decriminalised, another government official told.

IBC amendments: the cabinet note on Insolvency and Bankruptcy Code (IBC) amendments is going through inter-ministerial discussions to clear the ground for a fast-track mechanism . The fast-track framework will be an option for creditors. Once the mechanism is in place, creditors will have the option of reaching an informal out-of-court resolution that will be taken to the National Company Law Tribunal (NCLT)  for final approval.

Another major change likely is the project-wise resolution of distressed real-estate companies. The proposed changes in the IBC allow a more targeted and efficient resolution for financially distressed real-estate firms.

Education: the government is trying to attract foreign universities to get them to set up their campuses in India. The budget may see some policy announcements to fast-track this.

More teeth to the Companies Act: The Company Law Committee (CLC), which was set up by the ministry of corporate affairs, is currently reviewing the Companies Act, 2013. The government may look at giving more teeth to the Act to pin corporate governance lapses on directors. The government is likely to review the related party clause of the Act in view of Byju’s and Zee’s  governance lapses.

Ease of exit from SEZs : The government is likely to incorporate a provision in the Development of Enterprise and Services Hub (DESH) Bill to replace the Special Economic Zones (SEZs) Act, to facilitate an easier exit for companies operating within these zones.