The upcoming Union budget is arriving at a time when India’s economic situation seems relatively stable. GDP growth is strong, inflation is easing, the current account deficit is shrinking, and businesses are posting good results. Despite these positive signs, there are concerns about slow growth in consumer demand, limited private investment, and uncertainties in the global economy.
Unveiling the Interim Budget 2024 Blueprint
Given these circumstances, this year’s budget gains significance as it will indicate the government’s approach to sustaining economic growth. However, it’s worth noting that the finance minister will present an interim budget due to the approaching national elections in a few months. This means we won’t see a comprehensive annual budget.
Photo Credit: www.elections.in
Around mid-March, election dates are expected to be announced, triggering the model code of conduct. This code prevents the government from making any significant policy decisions. Consequently, major policy announcements aren’t anticipated in the interim budget. Still, the budget is crucial as it might provide insights into the policy direction, especially if the BJP is re-elected.
Unveiling the Interim Budget 2024 Blueprint
Fiscal Responsibility: It’s crucial for the government to manage its finances well. With limited funds, they should focus on reducing debt and maintaining a sustainable budget. The aim is to achieve a fiscal deficit target of 5.3% for 2024-25, moving towards 4.5% by 2025-26.
Investing in Growth: The government should keep investing in projects that boost economic growth. Capital expenditure, especially in infrastructure, has been effective in driving recovery. The plan is to increase such spending to around Rs 11 trillion, promoting growth.
Boosting Consumption: The spending patterns show that the recovery in people spending money has been slower, especially for those with lower incomes. To improve this, the government should consider measures like a small cut in taxes on petrol and diesel, which could stimulate spending without affecting the budget significantly.
Investing in People: India has a large working-age population, but for this to benefit the economy, there needs to be a focus on health, education, and skills. The government should increase spending on these services to ensure the workforce is well-prepared and can contribute meaningfully to the economy.
Supporting Rural Areas: Rural India, with 65% of the population, heavily relies on agriculture. To improve rural incomes, there should be a focus on adopting technology, boosting rural infrastructure, and enabling skills development for rural workers to transition to other sectors. Addressing rural health is also crucial for overall growth.
