YaMarkets • 2024-02-02
India's Interim Budget 2024, presented by Finance Minister Nirmala Sitharaman, aims to promote fiscal prudence, boost infrastructure spending, and provide relief to taxpayers through no changes in the taxation structure. The budget places a strong emphasis on welfare programs, economic transformation, and social welfare initiatives. It also focuses on skill development and training, promoting investments, and harnessing new-age technologies. This article by YaMarkets, the best trading platform, gets into the key highlights of the budget and analyzes its impact on the economy and financial markets.
The Interim Budget highlights the government's commitment to various programs benefiting women, youth, the poor, and farmers. Finance Minister Sitharaman stressed that the country progresses when these sections of society progress. Notably, the government has successfully pulled 25 crore people out of poverty in the last ten years. This focus on welfare is expected to have a positive impact on the overall socio-economic development of the country.
Income Tax
Infrastructure Development
Railways
'Lakhpati Didi' Scheme
Electricity and Green Energy
Electric Vehicles
Tourism
Promoting Investments
Technology
PM Awas Yojana
MSMEs
Fiscal Numbers
The Interim Budget has had a positive impact on the Indian Rupee (INR) and the domestic currency market. Forex traders noted the positive sentiment surrounding the budget, leading to a strengthening of the INR against the U.S. dollar. The reduction in the fiscal deficit to 5.1% of GDP for FY 2024-25 was particularly well-received by traders. Additionally, the weakening U.S. dollar in the overseas market contributed to the positive market response.
In January 2024, the INR traded steadily around a flat line, maintaining a mild positive bias. It emerged as the top-performing currency in Asian markets, appreciating by 1% to 2%. This resilience can be attributed to foreign portfolio inflows and the Finance Ministry's review highlighting India's economic strength, robust domestic demand, investment-led strategies, and macroeconomic stability.
Looking ahead, investors are closely monitoring the Federal Open Market Committee (FOMC) meeting and India's Interim Budget for FY 2024-25. The Finance Ministry projects India to become the world's third-largest economy with a GDP of $5 trillion over the next three years. However, external risks such as inflation, slow global growth, and geopolitical tensions could pose threats to the market outlook.
The stability of the INR can be credited to the Reserve Bank of India's (RBI) timely interventions in the foreign exchange market. The Fiscal Budget for FY 2024-25 aims to lower the fiscal deficit to 5.30% of GDP and reduce the budget deficit to 4.5% of GDP by FY 2025-26. These measures, along with the focus on welfare spending, are expected to contribute to economic stability and growth.
In terms of technical analysis, the INR continues to consolidate in the 82.78 to 83.45 range against the U.S. dollar. The USD/INR pair is confined within a descending trend channel, with a potential upside supported by being above the key 100-period EMA. However, the 14-day RSI indicates the current directionlessness of the pair. Resistance at 83.25 and support at the 83.00–83.05 zone are key levels to watch for potential market movements.
In conclusion, as we wrap up our exploration of India's Interim Budget 2024 and its impact on the economy and financial markets, it's evident that strategic decision-making in trading is more crucial than ever. YaMarkets, recognized as the leading trading platform, stands ready to be your dependable companion in the dynamic realms of Forex, Commodities, and Indices. With a commitment to simplicity, professionalism, and engagement, YaMarkets provides you with the tools needed to seize opportunities and execute well-informed trades.
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