In this podcast, businessline’s Shishir Sinha is joined by Aditi Nayar, Chief Economist, Investment Information and Credit Rating Agency (ICRA), who provides a quick take on the interim Budget. The discussion revolves around crucial aspects such as the fiscal deficit, capital expenditure (capex), private sector investment, state capex, and high-frequency economic indicators.

Nayar commends the government’s lower fiscal deficit-to-GDP ratio for FY24 and FY25, expressing pleasant surprise at the larger-than-expected capex, particularly for FY25. However, she raises concerns about the ambitious capex target of ₹11.1 trillion for FY25, speculating that the monsoon season and delayed budget presentation might hinder its realization.

The conversation shifts to private sector investment, where Nayar notes a moderate growth in capacity expansion plans across various sectors. She anticipates sustained but cautious private sector capex in the coming quarters.

Regarding state government capex, Nayar acknowledges healthy growth for FY24 but suggests that the full capex target might be missed.

The discussion then delves into high-frequency economic indicators, including the exuberant Services PMI and robust GST collections. Nayar cautiously discusses the possibility of GST rate rationalisation and provides insights into inflation expectations, emphasising the need for distributed rainfall to avoid spikes in perishable prices.

Nayar concludes by addressing GDP growth projections for FY25, offering a more conservative estimate of 6.2 per cent, citing uncertainties related to agricultural output, state capex timing, and export growth.

(Host: Shishir Sinha, Producers: Amitha Rajkumar, Nabodita Ganguly)

About the State of the Economy Podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.