Overview
India witnessed Finance Minister Nirmala Sitharaman presenting the interim Union Budget for the fiscal year 2024-25, signaling the government’s fiscal priorities in the run-up to the national elections. Despite maintaining current tax rates, the budget outlines a vision for a “Viksit Bharat” (Developed India) by 2047, emphasizing inclusive growth across various sectors.
Fiscal Responsibility Amid Election-Year Dynamics
- Finance Minister Sitharaman showcased fiscal responsibility, projecting a fiscal deficit of 5.1% for FY2024-25, lower than market expectations.
- The net government borrowing estimate of Rs 11.75 lakh crore, reduced from the previous fiscal year, resonated positively with market sentiments.
Infrastructure Boost
- A notable 11.1% increase in infrastructure outlay, equivalent to 3.4% of GDP, was announced to strengthen railways, roads, and logistics infrastructure.
- Identification of three economic railway corridors under the PM Gati Shakti program aims at fostering economic hubs and catalyzing development in tier-2 and tier-3 cities.
Housing for All and Middle-Class Support
- A commitment to completing two crore housing units in the next five years aligns with the ‘Housing for All’ mission.
- Specific measures targeting the middle-class living in sub-par accommodation were hinted at, with anticipation for detailed plans.
Focus on Female Enrollment and STEM Programs
- Encouraging statistics included a 28% improvement in female enrollment in higher education, particularly in STEM programs.
- Allocation of resources for the growth of female participation in sectors like electric vehicle (EV) manufacturing is expected to create new employment opportunities.
Positive Acknowledgment
- Positive Acknowledgment:
- Union Defence Minister Rajnath Singh expressed optimism, viewing the budget as a blueprint for a confident, strong, and self-reliant India.
- Emphasis on the inclusive nature of the budget, catering to the needs of every section of society, was highlighted.
Opposition Critiques
- Congress leader Sachin Pilot termed Sitharaman’s budget speech as an “election speech,” noting a lack of relief measures for the common masses facing inflation challenges.
- Congress leader Supriya Shrinate pointed out perceived discrepancies, claiming there was nothing addressing issues related to employment, agriculture, and women.
Bond Market Rally
Gaurav Dua, Head of Capital Market Strategy at Sharekhan by BNP Paribas, commended the fiscally responsible approach, leading to a rally in bond prices and appreciation of the INR against USD.
Sectoral Optimism
- S L Jain, MD & CEO of Indian Bank, welcomed the positive developments, emphasizing the alignment with national development goals.
- Experts from various sectors, including technology, healthcare, and agriculture, praised specific initiatives catering to their respective domains.
Conclusion
India’s interim budget for 2024 outlines a strategic path toward economic growth, infrastructure development, and social inclusivity. While political reactions vary, the market responds positively to the government’s fiscal responsibility. As the nation awaits the full budget post-elections, the outlined priorities aim to set India on a trajectory towards a developed and resilient economy.
