The unveiling of India’s Interim Budget 2024 has sparked discussions among economists and experts, shedding light on the nation’s economic outlook and fiscal strategies. Dhruv Research conducted an in-depth assessment of the interim budget through expert interviews and online survey PAN India to gauge the perceptions of the general public and experts on various aspects of the budget.
Experts felt that the budget felt more like a temporary measure than a fully fleshed-out fiscal strategy, surprising some with the absence of significant policy or tax changes in an election year. Despite this, experts noted alignment with their ideals, particularly in domains like clean energy and gender equality. 1 in 5 (21.9%) respondents indicated that the budget met their expectations.
Approximately 3 in 5 (58.8%) respondents were optimistic regarding the economic trajectory of our nation.
61.3% of respondents believed that the budget effectively tackled the challenges associated with inflation and unemployment.
The main focus of the budget lies in fiscal consolidation, with the government’s overarching goal being to decrease the budget deficit to 5.1 percent in the fiscal year 2024-25 (FY-25), compared to 5.8 percent in 2023-24 (FY-24).
Around 40% respondents believed that the economic targets outlined in the Union Budget are achievable. Experts suggested a strategy of curbing spending to tackle this issue. Notably, a reduction in infrastructure spending is anticipated for the current year, with an increase of 11.1% in the allocation for infrastructure expenditure.
The budget’s impact on investor confidence, particularly in terms of Foreign Direct Investment (FDI), is being closely observed. While some experts suggested waiting for the complete budget presentation before making investment decisions. However, overall investor confidence has remained steady. The budget has generally upheld investor confidence. 2 in 5 respondents stated that the budget will bolster confidence among investors in the country.
The budget will boost investor confidence in the country
Around one crore taxpayers are expected to benefit from the withdrawal of disputed direct tax demands, particularly for the fiscal years 2009-10 to 2014-15. Taxation policies have been favourably received, including stability in tax rates and extended benefits for start-ups and investments. A significant corpus of ₹1 Lakh Crore, providing interest-free loans for long-term financing or refinancing, has been commended for its potential in empowering youth.
Furthermore, the budget’s focus on increasing capital investments by 11% is expected to spur growth, particularly in the logistics sector, and enhance connectivity. This, in turn, is anticipated to create employment opportunities and drive economic growth, despite the absence of explicit strategies for employment generation.
Initiatives like the PM Mudra Yojana, which has sanctioned 43 crore loans aggregating to ₹22.5 lakh crore, along with other schemes such as the Fund of Funds and Start-Up India, have been instrumental in fostering entrepreneurship and job creation. However, concerns linger about the lack of measures specifically targeting employment for women, particularly in sectors like textiles. Only 32.3% of respondents believed that the budget adequately addressed measures to promote job creation overall.
Budget includes sufficient measures to promote job creation in India
The Women and Child Development Ministry has been allocated Rs 26,000 crore in 2024-25, a marginal increase of 2.52 % from the previous year’s budget. Experts have commended the budget for its increased allocation towards gender budgeting, rising from 5% to 6.5%. However, concerns linger regarding the effective implementation of these allocations and the need for a comprehensive strategy to address women’s diverse needs and roles.
The Rural Development Ministry’s budget has been augmented to Rs 1.77 lakh crore for the upcoming fiscal year, marking an increase of approximately 12% from the previous year’s allocation of Rs 1.57 lakh crore. One of the significant highlights of the rural development budget is the substantial increase in funding for the flagship Mahatma Gandhi National Rural Employment Guarantee Scheme.. The allocation for the scheme in 2024-25 stands at Rs 86,000 crore, reflecting an impressive rise of around 43% compared to the previous budget’s allocation of Rs 60,000 crore. These enhanced budgetary allocations garnered a
positive response, with 36.5% of respondents stating that the budget adequately addresses the needs and development of rural areas.
Budget addressed the needs and development of rural areas sufficiently
Regarding climate change initiatives, the focus on climate-resilient activities, including renewable energy and sustainable agriculture, has been positively received. Specifically, the idea of rooftop solarization is well-received by experts in the field of economics as it is aligned with the goal of expanding electricity coverage in an environmentally sustainable manner. The economic and social impact of empowering farmers through additional income streams and job creation in new biorefineries aligns with the broader goal of rural economic development.
Future Expectations
Nearly half of the respondents (47.9%) felt that the budget would lead to positive long-term impacts on the country’s economy and society and foster economic growth and social development.
Looking ahead, experts anticipate a budget aligned with current fiscal strategies, aiming to balance societal needs with financial prudence. Assurances of potential tax benefits in the upcoming full-fledged budget, along with careful financial management, provide a foundation for future economic stability.
Conclusion
While India’s Budget 2024 reflects efforts to address various economic challenges and opportunities, concerns remain about the translation of policies into tangible impacts on the ground. As the nation navigates towards economic growth and sustainability, innovative schemes and prompt policy adjustments will be crucial in realising inclusive development.
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