In a much-anticipated move, Union Finance Minister Nirmala Sitharaman presented the interim Budget for 2024 on February 1, marking her sixth budgetary announcement. With an eye on the upcoming general elections, Sitharaman addressed a myriad of issues, placing particular emphasis on youth and women empowerment. The budget also underscored fiscal responsibility, maintaining consolidation while propelling capital expenditure.
Key Fiscal Measures
- Fiscal Deficit Target Reduced: Sitharaman set an ambitious target by lowering the fiscal deficit for the fiscal year 2024-25 to 5.1% of the GDP. This move reflects the government’s commitment to prudent financial management.
- Stable Tax Rates: Notably, there were no alterations to direct or indirect tax rates, offering stability to businesses and taxpayers alike.
FM Sitharaman’s Post-Budget Highlights
In a post-budget press conference, Sitharaman outlined five critical principles, referred to as ‘Disha Nirdashak’ baatein, indicating a directional approach for governance. These include a focus on social justice, prioritising the welfare of the poor, youth, women, and farmers, a sustained emphasis on infrastructure development, leveraging technology for enhanced productivity, and the formation of a high-power committee to tackle challenges arising from demographic shifts.
Economic Achievements
- Impressive GDP Growth: Sitharaman proudly announced that India has experienced three consecutive years of 7% GDP growth, solidifying its position as the fastest-growing economy in the G20.
- Capex Commitment: Despite challenging economic conditions, the Finance Minister emphasised the continuation of government capital expenditure, considering it crucial for sustained economic development.
- Global Infrastructure Project: The India, Middle East, European Corridor (IMEC) project will proceed as planned, overcoming disturbances in the Red Sea region. This initiative is expected to foster economic ties and connectivity between the participating regions.
Sector-Specific Measures
- Agricultural Sector: The budget introduced targeted measures for the agricultural sector, recognising the importance of the Annadata (farmers) in the socio-economic fabric. This move aligns with the overarching theme of youth and women empowerment.
- Tax Reforms: A significant announcement involved the withdrawal of 1.1 crore outstanding small direct tax demands for certain years, a move that is anticipated to cost less than ₹3,500 crore to the exchequer.
- Disinvestment Plans: While there is no fixed target for disinvestment in the fiscal year 2024-25, the government remains committed to aligning with the fiscal consolidation path and surpassing it.
Looking Forward
As Finance Minister Sitharaman concluded her post-budget presser, she emphasised that the government not only aligns with the earlier fiscal consolidation path but surpasses it. The relevance of the target to reduce the Centre’s debt-to-GDP ratio to 40% is under scrutiny, reflecting a nuanced approach in the post-COVID era.
In the aftermath of the budget presentation, various stakeholders eagerly await the unfolding of these plans, eager to witness the impact of these measures on India’s economic trajectory.
