Steering towards sustainable & equitable growth

Synopsis

The interim budget serves as a crucial milestone in this journey, aligning with broader goals of sustainability, inclusive development, infrastructure enhancement and fiscal responsibility. It hinges on harnessing the power of women, youth, farmers and innovation for nation’s development. The finance minister reminded us that the aspiration of growth must go hand in hand with having adequate financial resources and hence, opening India to more investment from the world is more important than ever for India’s growth story to continue.

Steering Towards Sustainable and Equitable GrowthiStock

India stands at a pivotal moment in its history, poised for transformative growth and development. With the ambitious goal of becoming a $5 trillion economy, the nation is embarking on a journey of profound change, as outlined in the visionary Viksit Bharat@2047 initiative.

The interim budget serves as a crucial milestone in this journey, aligning with broader goals of sustainability, inclusive development, infrastructure enhancement and fiscal responsibility. It hinges on harnessing the power of women, youth, farmers and innovation for nation’s development.

The finance minister reminded us that the aspiration of growth must go hand in hand with having adequate financial resources and hence, opening India to more investment from the world is more important than ever for India’s growth story to continue. Her budgetary allocations reflect a clear roadmap aimed at steering the nation towards sustainable and equitable growth. At its core, the budget emphasises several key priorities, including fostering green growth, addressing socio-economic disparities, advancing infrastructure development and maintaining fiscal prudence.

Fiscal prudence remains a cornerstone of the government’s economic strategy. The pre-poll budget maintains a focus on fiscal consolidation, aiming to reduce the fiscal deficit to 5.1% of GDP in 2024-25 and below 4.5% by 2025-26. This commitment to fiscal discipline is complemented by efforts to keep inflation within manageable limits and promote bilateral trade agreements. With a thrust to semiconductor and electronics manufacturing, the budget lays impetus on being aatmanirbhar and positions India to become a major player.

One of the budget’s standout features is the substantial increase in capital investment outlay, reaching ₹11.11 lakh crore – an 11.1% surge from previous year. This financial injection is poised to act as a catalyst, generating a ripple effect. Job creation, enhanced logistics efficiency, lower operational costs and heightened demand are the anticipated outcomes, fostering a positive environment for both employment and economic expansion. Related announcements to promote first-mile and last-mile connectivity and development of economic corridors mark a significant move towards achieving the goal of reducing logistics costs to around 8% of GDP by 2030.

The transition from Jai Jawan Jai Kisan Jai Vigyan to Jai Anusandhan signifies a crucial focus on research and development. A corpus of ₹1 lakh crore is allocated for technological research and incentivise private sector participation in emerging sectors.

This vote-on-account budget has set the premise for the upcoming budget post elections and irrespective of the government that comes to power the key tenets of this budget will form guiding principles for next 2-3 years. The growth trajectory of India is being watched by everyone and we are keenly anticipating the charter that will lead to Viksit Bharat@2047. The upcoming full Budget holds the promise of unveiling comprehensive strategies that will shape India’s developmental journey.



Yezdi Nagporewalla is CEO, KPMG in India

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( Originally published on Feb 02, 2024 )

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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