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Bidding Wars Heat Up: 2024 Budget Buzz Begins



Bidding Wars Heat Up: 2024 Budget Buzz Begins
Image source: Defi Media

The Chancellor of the Exchequer – the Finance Minister is expected, as usual, to hold various pre-budget consultations. Operators and civil society are invited to submit their pre-budget proposals for the 2024-25 Budget. In the current electoral context, bidding could be very pronounced.

The approach of March usually marks the arrival of the next Budget. Subsequently, proposals are formulated, followed by budget consultations and other related preparations. In this regard, associations and professional organizations, unions, NGOs, and civil society organizations are invited to submit their ideas and suggestions to the Ministry of Finance by no later than March 15.

Bidding Wars Heat Up: 2024 Budget Buzz Begins

Yuven Peechen, lecturer in finance. The 2024-2025 Budget, which could be the last of the current regime, is likely to be electoral, according to Yuven Peechen, a Lecturer in Finance. He believes that the Chancellor of the Exchequer will be focusing on all age groups. “We could expect a general increase in pensions to fulfill electoral promises. With the impending Pay Research Bureau (PRB) report, there should also be a salary realignment, along with other populist measures for various categories of the electorate,” he suggests.

Bidding Wars Heat Up: 2024 Budget Buzz Begins

Gerald Lincoln, Country Managing Partner at EY. On his part, Gerald Lincoln, Country Managing Partner at EY, expects a fairly social Budget, similar to last year’s which included many initiatives in favor of the poor and middle classes. “It is usually the case in an election year to have electoral gifts for the population. I think the Chancellor of the Exchequer will be a bit more attentive this year, however, it is difficult to predict if we will be disappointed or pleased. The key is consistency and continuity. We had a tax rate increase in 2023 with income tax rising from 15 to 20%. It would be preferable to avoid any instability in this regard, especially with yearly changes,” he notes.

The goal of any government should be to reduce the budget deficit and public debt at the end of a term.”How will populist and electoral measures be financed? Yuven Peechen is concerned that this may worsen the level of public debt. Public debt increased from Rs 427 billion in June 2023 to Rs 438 billion in September of the same year, before climbing to Rs 455 billion in December 2023. As for the budget deficit, it was projected to be 4% of GDP for 2022-23. Nevertheless, he believes that the Chancellor of the Exchequer has some leeway due to the economic activity recovery, including tourist revenue, among other sources. Mini reshuffle.

In addition, sectors such as agro-industry, SMEs, and financial services, considered important for the local economy, have recently come under new ministries. Could this influence the preparation of the next Budget? Gerald Lincoln points out that it is the same government. “The outgoing minister will pass on the dossier to the incoming minister. This is a common practice. I do not expect a change in direction,” he concludes.

Source: Defi Media

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