Crafting the Budget for the world’s most populous country and the fastest growing economy is no child’s play. And India’s Union Budget is never merely an annual financial statement. To put it simply, it is an intelligent representation of the financial priorities of a rather diverse group of people. To be able to reinvent the discourse about GDP in terms of Governance, Development and Performance is something remarkable about the interim Budget 2024-2025. A growth-oriented Budget with focus on capital outlay, infrastructure, railway, defence, aviation is all very welcome.
First things first:
The proposed 11.1 per cent increase in capital expenditure outlay to ₹11.11-lakh crore, constituting 3.4 per cent of the GDP, demonstrates the government’s commitment to fostering economic growth through robust infrastructure.
The interim Budget’s unwavering focus on infrastructure development is set to give a further push to the manufacturing sector. This aligns seamlessly with the idea of a viksit, Atmanirbhar Bharat, as well as our industry’s needs, and boosts both growth and employment.
We welcome the announcement about the implementation of three major railway corridor programmes under PM Gati Shakti and 42,000 normal rail bogies to be converted to ‘Vande Bharat’ coaches. The Gati Shakti projects will improve the logistics in the country while the stainless steel going into making the coach bodies enhance the safety and comfort of passengers. And so do we welcome the new scheme for strengthening deep-tech technologies for defence purposes and expediting atmanirbharta.
The Hon’ble Finance Minister rightly noted that the average real income of the people has increased amid a moderate inflation. The time is, hence, right to remain bullish on the demand for the stainless steel industry, which plays a pivotal role in the nation’s infrastructure, manufacturing, and construction sectors. The Budget’s support to the ‘Make in India’ vision is aligned with our commitment to producing high-quality stainless steel products that meet global standards.
A lower fiscal deficit is encouraging
One of the standout points in the interim Budget is the commendable reduction in the fiscal deficit from 5.8 per cent to 5.1 per cent of GDP for the upcoming fiscal year. This move towards fiscal discipline is certainly encouraging. A lower fiscal deficit not only reflects prudent financial management but also instils confidence in the economic outlook. It is crucial for sustaining economic stability and fostering investor confidence, which are pivotal for the growth of industries like ours. The Budget that comes at a time when the International Monetary Fund has upgraded the growth outlook for India, is heartening news for the people and industry.
Additionally, in the wake of geopolitical fragility, the announcement of the India-Europe-Middle East strategic corridor is a strategic move. This corridor holds the promise of expanded trade opportunities and enhanced economic ties. Everything comes at a cost. And given that the uncertainties prevailing for several months now come at the cost of exports for businesses, besides, of course, the world’s peace, the corridor could provide a counterbalance to such situations..
Towards a green future
The Budget’s emphasis on sustainability through rooftop solarisation resonates with the stainless steel industry’s commitment to environmental responsibility. As we navigate a future where sustainability is non-negotiable, the government’s support for eco-friendly initiatives is a much-needed development. Stainless steel is inherently sustainable, the material 100 per cent recyclable, and the industry has been actively engaged in adopting environmentally friendly practices. The Budget’s recognition of the importance of sustainable practices aligns with our vision for a greener future. Empowering the youth through skilling and entrepreneurship support, strengthening educational infrastructure of IITs and universities is an icing on the cake in this shared vision for a prosperous sustainable future.
The full budget and the wish list
While today’s Budget provides a preliminary glimpse into the government’s fiscal priorities in an election year, we eagerly await the comprehensive Budget in July. We believe it presents an excellent opportunity for the government to address the long-standing demands of the stainless steel manufacturing sector. Severe dumping by China, Vietnam and certain FTA (Free Trade Agreement) countries has put pressure on the domestic players, especially the Micro, Small and Medium Enterprises (MSME) sector. The need of the hour is a level-playing field and some protectionist measures in order to safeguard the homegrown manufacturers.
The stainless steel industry is abuzz with optimism already.
(The author is Managing Director, Jindal Stainless)