On February 1st 2024, the Finance Minister of India, Mrs Nirmala Sitharaman presented the interim financial budget for the financial year 2024-2025 but this budget is only aimed at the next four months before the new government takes over. On 31st January, the minister submitted the Economic Report of the past ten years under the leadership of PM Modi. This report was released instead of the usual Economic Survey released annually.
The report was “Indian Economy – A Review" enlisting the macroeconomic picture and important economic highlights of the past ten years of the NDA government. Both the report and the budget talked largely about the achievements of the current government and the policies it will focus on in the upcoming years as well. Being in an election year, the budget speech was rhetorical with a lot of praise for the government as well as highlighting various accomplishments.
This budget speech was the shortest one comprising only 58 minutes. Nirmala's speech duration has only reduced in the past six years. The Minister and the Government deemed the budget as part of Amrit Kaal which is for the next 25 years going till 2047 when India will be a developed country as per the vision of the current government known as "Viksit Bharat".
Major Announcements from the Budget Speech
- The fiscal deficit target will be lowered to 5.1% and later 4.5% by 2026.
- Focus on four castes- Poor, Youth, Women, Farmers
- Government's criteria- GDP - governance, development, performance
- 25 Cr people lifted out of multidimensional poverty
- Viksit Bharat by 2047 (a century after Independence)
- The government believes India is the faster-growing economy
- The average real income of people rose by 50%
- Lakhpati Didi scheme - which aims to train women in self-help groups
- Increase in dairy and oil seed production
- Announced Rooftop Solarisation Scheme
- Push for the Tourism sector
- Special Committee to examine Demographic challenges
- Defense Budget- Rs 2.6 lakh Cr
- FDI in the last ten years doubled compared to the previous year
- Expected 7% growth rate
Major Takeaways
- Shortest Budget Speech ever- 58 minutes.
- The budget again was read from a digital tablet.
- No change in taxation
- Establishment of three large railway corridors
- 2 Cr Houses to be built as part of PM Awas Yojana
- 300 Units free for 1cr houses under the Rooftop Solar Project
- Crop insurance to 4 cr farmers
- Improvement of tourist infrastructure and connectivity in Lakshadweep
- 40,000 normal railway bogies will be converted to Vande Bharat standard
- Capital Expenditure Spending increased by 11% to ₹11.11 lakh crore- 3.4% of GDP.
- Vaccination for cervical cancer in girls
- Lakhpati Didi Scheme targeting 3 cr women
- Tax benefits for startups
Criticisms
Opposition parties claimed that the budget was hollow and didn't address significant problems at hand. Most of the speech was rhetorical and didn't specifically seem like a normal budget speech. A simple and status quo budget without many allocations or bold decisions. Leaders from different states blamed for ignoring their respect
Analysis
As an election year, people can consider this a very simplistic and conservative budget. Modi and BJP being extremely politically oriented, the budget did have political rhetorics and even included direct political communication with its voters. Hence this is why even Ram Mandir and social media talk of Lakshadweep were mentioned in the speech.
Modi government's pro-poor schemes got the highest attention in the budget. Even though the Modi government claim these are not freebies and giving essential services to the needy; Welfare is one of the most important pillars of the Modi government. This budget has also reflected that same essence.
The speech was designed in a way to feel that the current government will be reelected beyond doubt and the foundation for their future policies is also set here. Not changing the Income Tax is a relief for the middle class and is more than enough for their votes to be secure with the BJP. Even though this was an election year there were no election-based projects or people-friendly announcements.
Beyond doubt, the fundamentals of the Indian economy remain strong. Despite the Russia-Ukraine war and the Israel-Palestine War, India hopes for a favourable geopolitical climate. This is why the mention of IMEC in the speech remains significant. We hope India will achieve good economic growth and that the current and future policies will pave for a better future.
Credits- MoneyControl, NDTV, ThePrint, Hindustan Times, The Indian Express, TOI, India Times
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