She has performed a delicate balancing act between setting forth a comprehensive growth plan, while also ensuring consistency in policy. The fact that India is aiming for a 7% real GDP growth in the face of a looming global economic recession demonstrates how well-positioned we are for post-pandemic recovery.
The budget has kept almost all constituents in mind – from underprivileged citizens to middle-class taxpayers, farmers, MSME owners, start-up entrepreneurs and corporate houses.
At the heart of this budget is the mammoth ₹10 lakh crore capex package, which will ensure the continuum of India’s cyclical recovery. By allocating more than 3% of GDP to capex, the government is attempting to give a much-needed boost to private sector capex. I am quite certain, this strong measure will encourage private players to reconsider their capex plans. Capital expenditures, by definition, have a greater multiplier effect than revenue expenditures, with each rupee spent having a multiplier of thrice the amount spent.
The medium-term glide path for fiscal consolidation has been clearly outlined in this budget, as it has in the past. The current fiscal deficit of 5.9% enables India to experience higher growth in years that may be challenging for several other nations.
The emphasis on improving regional connectivity, through the construction of airports and heliports, as well as a capital outlay of ₹2.40 lakh crore for railways, is consistent with the government’s broad-based policy of improving physical connectivity between villages and towns, towns and cities, and cities and metropolises. This is a rich opportunity to provide employment opportunities in the months to come.
The government is doing a good job of promoting the manufacturing sector by allowing new co-operatives, many of which could be MSMEs, to pay a lower tax rate of 15%. This step will broaden the secondary sector, which is expected to contribute more to GDP in the coming years. Farmers will benefit greatly from the government’s intention to modernise agriculture by investing in agri-tech. Other pro-farm initiatives such as the ‘Shree Anna Global Hub for Millets’ programme will harness the agri sector’s export potential. To improve ‘ease of doing business,’ the government has reduced over 39,000 compliances and decriminalised over 3,400 legal provisions. This will go a long way toward assisting corporate India in reaching its full potential.It is heartening to see the government setting the pace for climate action by announcing a ‘green budget’ that will pave the way for a greener planet. The focus on ‘green energy’ and ‘green mobility’ demonstrates this government’s awareness of the greater challenges the world is currently facing.
Budget 2024 could put India on track to become the world’s fastest-growing major economy in the coming fiscal year. India is a politically stable economy and is ranked among the top-growing global markets. To top it off, as India strives to be aatmanirbhar, the rest of the world may come to rely on our country for growth, materials, and profitable investments.