Introduction:
India’s Finance Minister Nirmala Sitharaman is set to present the highly anticipated Union Budget for the fiscal year 2024-25 in the Lok Sabha on July 23rd. This budget will be a crucial economic document for the Modi government’s third term, as it aims to lay the groundwork for transforming India into a developed nation by 2047.
Consultations with Experts:
In the lead-up to the budget presentation, Prime Minister Narendra Modi held a meeting on July 11th with eminent economists to elicit their views and suggestions. The meeting was attended by a diverse group of experts, including Niti Aayog Vice Chairman Suman Bery, Chief Economic Advisor V. Anantha Nageswaran, and renowned economists such as Surjit Bhalla, Ashok Gulati, and veteran banker K.V. Kamath. The purpose of this high-level consultation was to gather insights and recommendations from the country’s leading economic minds to help shape the government’s policy priorities and strategies for the upcoming union budget.
Key Focus Areas:
Boosting Consumption and Growth:
The budget is expected to focus on measures to boost consumer spending and drive economic growth. This may include tax relief for the common man, addressing inflation, and supporting sectors hit hard by the pandemic.
Accelerating Infrastructure Development:
The government is likely to continue its focus on infrastructure development, with increased allocations for projects in sectors like roads, railways, and renewable energy.
Promoting Domestic Manufacturing:
In line with the “Make in India” initiative, the budget may introduce incentives and policy support to strengthen the country’s manufacturing capabilities and reduce dependence on imports.
Investing in Human Capital:
The budget may allocate more resources towards education, healthcare, and skill development, as the government aims to build a robust and productive workforce to support its vision of a developed India.
Driving Digital Transformation:
Given the government’s emphasis on digital India, the union budget is expected to provide further impetus to initiatives like digital payments, e-governance, and the use of emerging technologies.
Enhancing Sustainability and Climate Action:
The union budget may include measures to promote renewable energy, encourage green investments, and address climate change-related challenges.
Stakeholder Consultations and Economic Backdrop:
Finance Minister Sitharaman has already held discussions with various stakeholders, including economists and industry leaders, to gather their inputs for the upcoming union budget. These consultations are crucial in ensuring that the union budget reflects the diverse needs and aspirations of different sectors of the economy.
The economic growth rate of 8.2% recorded in the current fiscal year (2023-24) provides a positive backdrop for the budget preparations. However, the government will need to navigate various challenges, such as high inflation, global economic uncertainties, and the need to maintain fiscal prudence while addressing the pressing developmental needs of the country.
“We do not expect any big sops in the Budget. There might be targeted policies addressing sector-specific stress, especially on the rural side. State governments are more likely to come up with policies which could be deemed populist in the run-up to the elections,” Gupta said.
“The central government is likely to stick to its path of fiscal consolidation in the upcoming union Budget. The focus is likely to remain on growth through targeted expenditure on schemes and policies which will lead to more employment and income generation,” Aditi Gupta, economist, Bank of Baroda told ETOnline.
Conclusion:
As the Modi government enters its third term, the 2024-25 budget will be a crucial document that will shape the economic trajectory of the nation in the years to come. With the government’s ambitious goal of transforming India into a developed country by 2047, the upcoming union budget is expected to outline a comprehensive roadmap to achieve this vision and propel the country towards a more prosperous and inclusive future.