Introduction
The recent interim budget for 2024-25 presented by India's Finance Minister, Nirmala Sitharaman, has sparked discussions about its effectiveness in addressing past economic challenges. While some argue that the budget focused on capacity building across various sectors, others believe it failed to tackle the issue of demand. In the following lines, we will delve into the budget's main themes and analyze its potential to drive sustainable economic growth.
Fiscal Strategy
The interim budget 2024 tried to strike a balance between achieving sustainable economic growth and implementing specific welfare measures. Since it was presented ahead of the Lok Sabha elections, the budget did not introduce any major policy changes or tax revisions. Instead, it laid out a vision for the next five years, portraying India's resurgence as it strives to become the world's third-largest economy.
Key Highlights
The budget emphasized key sectors, such as infrastructure, tourism, and housing. It increased the capital expenditure target by 11.1% to Rs 11.11 lakh crore, focusing on boosting infrastructure and job creation. Furthermore, the government introduced a scheme providing interest-free loans to states to promote tourism and allocated funds for tourism development in Lakshadweep.
The government shared that India is close to achieving its target of building 3 crore houses under the rural housing scheme. It prposef to construct an additional 2 crore houses in the next five years. Alongside these achievements, the budget highlighted the remarkable growth of Indian chess grandmasters, with the number reaching 80 compared to 20 in 2010. We don't really understand the significance of this information in budget!!!
Commitment to Welfare and Achievements
The budget emphasized the government's dedication to the welfare of women, farmers, youth, and the poor. It showcased the achievements of various schemes such as Ujjwala, PM-KISAN, PM-JAY, PM-SYM, and PM-KMY. These initiatives were designed to empower marginalized sections of society and improve their quality of life.
Economic Resilience and Reform
The interim budget also acknowledged the resilience of the Indian economy during the COVID-19 pandemic and its subsequent recovery.
Despite the progress, challenges such as inflation, fiscal deficit, current account deficit, and unemployment still loom. The guiding principles remained to address these issues, placing importance on sound macroeconomic fundamentals, skill development, energy transition, and ongoing reforms.
Reflection and Evaluation
The budget failed to strike a balance between stimulating consumption and investment, exports, and public expenditure, while ensuring fiscal prudence, monetary stability, and social welfare. However, the true impact of the budget will depend on the implementation of its various schemes and measures.
Conclusion
India's Interim Budget 2024 - 25 was a comprehensive document that combined elements of an economic survey and a vote on account. It charted the achievements, challenges, and and more looks like a vision of the Indian economy, showcasing a roadmap for sustainable growth in the coming years like a NITI AYOG document. Although the budget addressed certain sectors and welfare schemes, questions remain about its effectiveness in tackling underlying issues of demand. Overall, it is now up to the government's execution and the outcomes of these measures to determine the success of the budget and its impact on the economy and the people.
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