India Interim Budget 2024 - An Overview

 

Introduction

 On February 1st, Finance Minister Nirmala Sitaraman an influential figure responsible for economic policies and fiscal planning presented the interim budget 2024 in the Indian Parliament. This budget holds immense importance as it sets the financial framework until a full-fledged budget is passed by the new government. Here we will discuss various key provisions and implications of the interim budget, critically analysing its potential effects on India's economy and discussing its relevance in addressing current socio-economic challenges.

 Macro-economic Indicators

 The interim budget focuses on bolstering economic growth, reducing unemployment, and ensuring inclusive development. The Gross Domestic Product (GDP) growth rate is projected at 8.9% for the financial year 2023-24, and nominal GDP in 2024-25 is 10.5 percent which showcases the government's commitment to revitalizing the economy. This projection aligns with the prevailing sentiments and expectations of various economic experts, instilling confidence in the government's fiscal management.

 Fiscal Consolidation and Revenue Measures

 The interim budget heavily emphasizes fiscal consolidation to maintain a stable macroeconomic environment. With the fiscal deficit target of 5.1 % of GDP for the upcoming financial year and lower than previous Fiscal Year 5.8%, the government aims to strike a balance between stimulating economic growth and maintaining fiscal prudence. However, it is important to critically evaluate the feasibility of achieving this target while simultaneously addressing the pressing demands for public expenditure and economic reforms.

 The government proposes several revenue measures to bridge the fiscal deficit. These measures include rationalizing subsidies, increasing tax collections, and promoting Non-Tax Revenue (NTR). While reducing subsidies might lead to short-term fiscal gains, its long-term implications on welfare schemes and inclusivity need careful consideration. Additionally, effective implementation of tax reforms and improved tax compliance will be critical in achieving the projected revenue targets.

 Economic Revival Strategies

 To revive the economy the budget introduces various measures such as tax reforms incentives for industries and investment in infrastructure projects. The government aims to attract foreign direct investment (FDI) by easing regulations and simplifying the tax structure thereby promoting economic growth (Ministry of Finance 2024). Additionally the budget emphasizes the development of smart cities digital infrastructure and renewable energy projects to foster sustainable economic growth and reduce carbon emissions.

 Sectoral Focus: Agriculture and Rural Development

 The interim budget lays strong emphasis on agricultural and rural development, recognizing the potential of these sectors in driving inclusive growth. The Pradhan Mantri Kisan Samman Nidhi Scheme, aimed at providing direct income support to small and marginalized farmers, has been expanded to cover a larger number of beneficiaries. This step holds significant promise in addressing poverty and rural distress. However, its effective implementation, ensuring transparency and fair distribution, warrants scrutiny.

 Furthermore, the interim budget enhances allocations for rural development by launching various programs such as Pradhan Mantri Gram Sadak Yojana and Swachh Bharat Mission. These initiatives, although instrumentally valuable, necessitate rigorous monitoring and evaluation to ensure efficient resource utilization and desired outcomes.

The Budget 2024 emphasizes the government's commitment to key sectors such as healthcare education infrastructure and agriculture. For instance, a significant portion of the budget is allocated to the healthcare sector to strengthen the country's public health infrastructure and improve access to quality healthcare services, specifically free vaccination of cervical cancer for women age group from 9 to 14 years. (Ministry of Finance 2024). This reflects the government's recognition of the importance of a robust healthcare system, especially in the wake of the COVID-19 pandemic.

Furthermore, the budget also focuses on boosting the agricultural sector through increased investment in irrigation technology and research. This is crucial for ensuring food security and enhancing the livelihood of farmers (Ministry of Finance 2024). Additionally, the budget allocates substantial funds to enhance the quality of education and promote skill development programs reflecting the government's commitment to human capital development.

 Infrastructure and Social Sector Spending

 Recognizing the transformative potential of infrastructure development, the interim budget allocates substantial funds to this sector. The government's 'National Infrastructure Pipeline' aims to develop world-class infrastructure across key sectors, including transportation, energy, and urban development. By doing so, the government seeks to generate employment opportunities and attract investments, ultimately driving economic growth.

The Budget 2024 also focuses on social welfare and inclusive growth by allocating funds for various welfare schemes aimed at uplifting marginalized sections of society. These schemes include financial assistance for low-income households’ employment generation programs and initiatives to empower women and improve their socio-economic status (Ministry of Finance 2024). By prioritizing social welfare, the government aims to reduce income inequality and ensure the overall well-being of its citizens.

 Additionally, the budget addresses social sector spending, primarily focusing on education and healthcare. It allocates greater resources to school education, higher education, and the Ayushman Bharat program. This renewed focus on social sectors indicates the government's commitment to human capital development and improving overall social welfare. However, comprehensive plans to address implementation challenges and ensure inclusive access to quality education and healthcare need to accompany these allocations.

 Conclusion

 In conclusion, the interim budget 2024 aims to consolidate India's fiscal position, stimulate economic growth, and address key socio-economic challenges. While some provisions hold immense promise, the challenges of implementation and monitoring cannot be overlooked.

This Interim Budget 2024 of the Government of India reflects the government's commitment to economic growth social welfare and inclusive development. Through the strategic allocation of funds, the budget aims to strengthen key sectors revive the economy and promote inclusive growth. By analysing the implications of the budget, we gain insights into the government's priorities and strategies for the upcoming fiscal year. The government must ensure efficient resource utilization, foster transparency, and maintain a conducive business environment. Additionally, strong collaboration with stakeholders, including state governments, will be crucial in translating these financial provisions into tangible outcomes. The interim budget sets the stage for the new government, indicating its intentions and priorities. It is now up to the government to ensure effective execution, thereby steering India towards sustainable and inclusive development.