Ahead of the general elections, Finance Minister Nirmala Sitharaman on Thursday presented a ‘Vote on Account’ that came with a booster dose for the economy in areas of infrastructure and housing, even while striking a balance between growth and fiscal consolidation imperatives.

Highlighting the Centre’s ‘whole of nation’ approach in governance and policies, Budget 2024 lays special emphasis on youth, women, the poor and farmers, besides the middle class, which will now get a housing scheme. Tax rates remained unchanged on expected lines, given that the latest exercise was a vote on account. 

In her 60-minute-long Budget speech — her sixth in a row and the last Budget of the second Narendra Modi government— Sitharaman reaffirmed the government’s commitment to pursue a capex-led growth strategy in 2024-25 as well, while conveying its intent to rein in the fiscal deficit at 5.1 per cent, a number that beats the expectations of several economists and analysts, and could be music to the ears of foreign portfolio investors. 

For the current fiscal, Sitharaman has pegged the fiscal deficit at 5.8 per cent, lower than the 5.9 per cent budgeted earlier.

Budget 2024 continues to bet big on India’s growth momentum, factoring in nominal GDP growth of 10.5 per cent for 2024-25, while keeping the tax rates (personal, corporates and indirect taxes) unchanged. However, there was big tax relief for one crore tax payers, with Sitharaman announcing that the government would withdraw all outstanding direct tax demands up to ₹25,000 pertaining to the period up to FY 2009-10 and up to ₹10,000 for financial years 2010-11 to 2014-15.

She also announced a ₹1 lakh crore financing facility for start-ups.

CAPEX BOOST 

As expected, Budget 2024 persists with the capex-led growth strategy followed in the last three years, by raising the Centre’s capex budget spend by 11.11 per cent to ₹11,11,111 crore. The Centre’s capex allocation for 2023-24 stood at ₹10 lakh crore. 

Government-driven support has been the core support for the Indian economy in the last few years. 

Sitharaman also said the 50-year interest-free loan of ₹1.3 lakh crore would continue to be available for States in 2024-25, as well as for their infrastructure and capex spends. States’ capital expenditure was up more than 47% in April-September 2023, lending support to the heavy lifting done by the Centre on this front. 

VIKASIT  BHARAT

Presenting a report card on the achievements of the Modi-led government over the last ten years in delivering inclusive, balanced and higher economic growth, Sitharaman said the Government was working on making the country ‘Vikasit Bharat’ by 2047, and announced that the next generation of reforms will be rolled out in consultation with States. The Centre, when it returns to power later this year, will present a roadmap for Vikasit Bharat by 2047, she said. “We expect a resounding mandate from the people (in upcoming general elections),” she noted. 

DISINVESTMENT 

The disinvestment target for 2023-24 has been scaled down to ₹30,000 crore, and has been pegged at ₹50,000 crore for the next fiscal. 

CII VIEW 

In his immediate reaction to the Budget, Chandrajit Banerjee, Director-General, CII told businessline that “Industry is enthused by a pro-growth Budget, which has ticked all the boxes in terms of announcing the right mix of targeted policies for critical sectors and prioritising welfare, while adhering to the path of fiscal prudence. The continued focus on capex-led growth is expected to strengthen the economy’s foundation in the Amrit Kaal period as it aspires to become a developed nation by 2047.”

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