The economic agenda of the Budget aims to accelerate reforms, positioning India as a USD 5-trillion economy in the near future and transforming the nation into a ‘Developed India’ by 2047.
PTI reports that the Union Budget for the fiscal year 2024-25 is likely to be presented in Parliament by Finance Minister Nirmala Sitharaman during the latter half of July. According to sources, pre-budget consultations with industry chambers are slated to commence around June 20.
Before these discussions with FM Sitharaman, industry sources have indicated a scheduled meeting with Revenue Secretary Sanjay Malhotra on June 18. This upcoming budget is anticipated to set forth the economic agenda for the Modi 3.0 government.
Key Focus Areas and Economic Goals
Minister Sitharaman will need to balance stimulating economic growth without exacerbating inflation while also securing resources to meet coalition government commitments. The economic agenda aims to accelerate reforms, positioning India as a USD 5-trillion economy in the near future and transforming the nation into a ‘Developed India’ by 2047.
Current Economic Landscape
The Reserve Bank of India projects a 7.2 percent growth for the Indian economy in the current fiscal year, driven by improving rural demand and easing inflation. The Modi 3.0 government inherits a robust economy characterized by established fiscal discipline. A significant boost comes from the RBI’s highest-ever dividend announcement of Rs 2.11 lakh crore for FY 2024.
Policy Priorities
Key policy priorities for Prime Minister Narendra Modi’s third term include addressing agricultural sector challenges, job creation, sustaining capital expenditure momentum, and enhancing revenue growth to maintain fiscal consolidation. Rating agency S&P has expressed approval of the economic policies implemented over the past decade, upgrading the sovereign rating outlook to positive. There’s potential for a further rating upgrade within the next 1-2 years, contingent upon the government adhering to its fiscal deficit targets.
Revenue and Fiscal Challenges
While tax revenues appear robust, non-tax revenue poses a challenge due to limited progress in strategic disinvestment, apart from the sale of Air India. Ensuring steady revenue growth remains critical for maintaining fiscal discipline and supporting the government’s ambitious economic goals.
This budget will be crucial in outlining the economic direction for the Modi administration and setting the stage for India’s growth trajectory towards becoming a developed economy by 2047.
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