The Interim Budget 2024 has taken a comprehensive approach towards building a Viksit Bharat by 2047. With the continued capex on transport and digital infrastructure development, the budget has tried to ensure that economic progress reaches all parts of the country. The focus on empowering the youth, poverty alleviation, leveraging women's power, and farmer welfare underlines that the government is building the pathway for inclusive growth. By encouraging private and public investment in the agriculture sector and the development of domestic tourism infrastructure, the budget will boost employment generation.
Having said that, the budget tries to uphold fiscal discipline over populism by reducing fiscal deficit below 4.5 percent by 2025-26. The move is commendable. Having said that, as private investments have gained momentum, the lower borrowings by the Government will boost the availability of credit for the private sector. All these developments will have a profound impact on the economy.
The increased capex outlay in line to build better connectivity will further boost economic growth. Implementation of three major railway corridor programmes under PM Gati Shakti will boost operational and cost efficiency.
Expansion of existing airports and comprehensive development of new airports under the UDAN scheme will also benefit multimodal transportation. The emphasis on enhancing port connectivity, developing railway corridors, and alleviating congestion in high-traffic corridors is set to enhance logistics efficiency.
At a time when economic growth is gaining momentum, the digital economy is spreading its wings and the country is aiming to emerge as a global manufacturing hub, an enabling logistics ecosystem that makes India an attractive investment destination for global investors.
Along with keeping up the momentum for economic growth and infrastructure development, the budget has taken definitive measures to boost green energy adoption to meet the net-zero commitment by 2070. The introduction of viability gap funding for leveraging offshore wind energy potential for the initial capacity of one giga-watt and the proposal to expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure are steps in the right direction. Sustainability will emerge as a key underlying theme for development. The budget signals a period of resource-efficient and sustainable economic growth.
All in all, the government's emphasis on increased expenditure for infrastructure is poised to enhance the overall economy and, in the long run, stimulate investment activity. Despite global concerns about inflation, the government’s commitment to maintaining fiscal prudence in the interim budget is expected to support a stable interest rate scenario which will positively impact the economy.
(Views are personal, and do not represent the stand of this publication)
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