The expectation in the run up to the interim budget was that there would be no extraordinary announcements since it is only a vote on account. However, that did not diminish interest in what the Finance Minister would present before Parliament given that the global economic outlook remains complex and there are pockets of concern that merit attention domestically even as the economy remains strong.
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Moreover, with elections round the corner, there is a tendency to open the purse strings. In this backdrop, the FM stuck to convention by not announcing any changes to direct or indirect taxes while listing the government’s accomplishments over the last decade and laying out a path for the future. Most importantly, the commitment to fiscal prudence with the deficit for FY24 being contained at 5.8 per cent and a sharp reduction to 5.1 per cent projected for FY25, struck the right chord.
The continued thrust on capex by way of an 11.1 per cent hike on top of a record outlay in last year’s budget demonstrated the government’s commitment to support economic growth in a meaningful manner; moreover, infrastructure spending has a multiplier effect which permeates throughout the economy. Further, supported by buoyant revenues, the projection of lower borrowings will give the necessary headroom for the private sector to fund its own investment plans. In a manner of speaking, the Finance Minister – after a couple of years of doing the heavy lifting – is elegantly stepping aside to allow the private sector to step up to the plate.
The need of the hour is sustainable and inclusive growth. In this context, the measures to promote green growth through viability gap funding for off-shore wind, emphasis on EV ecosystem, rooftop solar initiative to benefit 1 crore households is noteworthy and will contribute to India’s journey of achieving net zero by 2070. The government has also laid a lot of emphasis on promoting research & development by setting up of a corpus of ₹1lakh crore for offering interest-free loans that will encourage the private sector to scale up innovation in sunrise industries.
Biotechnology, aerospace, defence, space, financial sector are just some of the areas where we are seeing mushrooming of start-ups offering cutting edge solutions. The proposed corpus will support many of these areas and more and be particularly beneficial to the youth of the country who are brimming with ideas.
Greater participation of women in the workforce has been an important area for our government. We saw the focus on this aspect once again last year when India hosted the G20 and pivoted the narrative from ‘women development’ to ‘women led development’. Creating an enabling ecosystem for this requires actions on many fronts including health and nutrition. In this budget, the government has added another layer of support by extending the benefits of Ayushmaan Bharat to all aanganwadi workers and ASHA workers & helpers, while aiming to have 3 crore lakhpati didis. Moreover, an immunisation campaign against cervical cancer for girls in the 9-14 years age group is praiseworthy.
As for the agriculture sector, again there was plenty in the Interim Budget to be happy about. Redoubling efforts for increasing private and public investments in post-harvest infrastructure; plan for achieving self-sufficiency in oilseeds; comprehensive program for dairy development and aquaculture – all these bode well for farmers as they look at both better yields from current production as well as diversification.
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Finally, the spirit of cooperative federalism was also visible in the Interim Budget with the provision of ₹75,000 crore for offering fifty-year interest-free loans to support milestone-linked reforms by state governments. This is a reflection of the need for the Centre and states to work together to achieve the vision of Viksit Bharat.
While clearly articulating its vision, focus areas, and directionality, the government has refrained from populist measures in the Interim Budget. This not only imparts credibility but also shows a maturing of the budget process; after all, governance is a continuous process which should not be unduly impacted by a singular event.
[The author is Immediate Past President, FICCI and MD, IMFA]