26 July 2024
The Economic Times
Op-eds
The budget 2024, with its focus on
9 key priorities, aims to propel India's economic potential to new heights. A good
budget addresses immediate socio-economic priorities while also laying out a
strategic and comprehensive approach for long-term growth. The budget 2024 does
just that. For me, there are four key take-aways as I go through the budget
details.
Tackling
economic issues
The two biggest issues among these are related
to income opportunities and disparities in regional development. The government
has announced a comprehensive set of initiatives to address these. Five schemes
focussed on skilling the youth and enabling greater women work force
participation have been announced; and a comprehensive package to support
growth of micro, small and medium enterprises has been announced. These will
certainly go some distance in creating the approximately 8 million non-farm
jobs annually, that the Economic Survey has recommended.
Fiscal prudence & economic growth
The government has
planned for an expenditure of Rs 48 lakh crore that is similar to what it had
proposed in the interim budget. However, it is heartening to note a reduction
in targeted fiscal deficit of 4.9%
of GDP that augurs well for overall macro-economic stability and has a positive
effect on India's attractiveness to foreign investors. The allocation of Rs
11.11 lakh crore for public capital expenditure has been retained, rightly so,
to sustain the economic momentum while the private sector capex continues its
upward journey in the next few quarters.
Sustainable
future
The budget champions a sustainable future for
India. Within this, a thrust to boost the development of supply chains
ecosystem is evident, vis-a-vis emphasis on renewable energy generation and
transmission infrastructure in previous years. The government has used taxes
and duties as the lever for it - as duties on inputs and equipment that India
needs to import to produce solar panels and cells have been reduced, while they
have been increased on inputs for which there is manufacturing capability
domestically. This will help manufacturers in India to access the technologies
and inputs needed in the short term, while providing the necessary protection
to enable the nascent industry to become globally competitive. The road map for
transitioning the harder-to-abate industries from energy efficiency and saving
targets to emission reduction targets will help kick-start the much-needed
carbon market within India.
Next-gen reforms
Analysis by the IMF has shown that globally,
including in India, productivity gains are needed to sustain the economic
growth, which has been slowing down. The government clearly recognises this and
has rightly placed emphasis in the budget on leveraging the emerging
technology, trade agreements, labour market flexibilities. Accordingly, the
budget's emphasis on next-generation reforms, focussing on land administration,
labor, capital, and entrepreneurship,
are hugely welcome.
Sumant Sinha(Founder, Chairman And CEO)
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