What to look out for in Budget 2024 ?
- The Union budget 2023-24 is crucial for India's economic trajectory, given the stable economic landscape.
The Background
- There are concerns like weak consumption demand and global uncertainties.
- The budget gains significance as an interim one preceding national elections.
Issues in Budget
- Fiscal Consolidation:
- India's general government debt to GDP is at 82%, limiting productive spending.
- Emphasis on fiscal consolidation crucial for sustainable debt trajectory.
- Anticipation of achieving the fiscal deficit target for 2023-24 and moving towards 4.5% for 2025-26.
- Expected compensations through robust direct tax collections, higher dividends, and healthy tax buoyancy.
- Capital Expenditure Focus:
- Post-pandemic, the government has used capital expenditure to drive growth.
- Budgeted government capex to GDP ratio set to increase to 3.4% in 2023-24.
- Continued focus on infrastructure, anticipating a 10% growth in capex to around Rs 11 trillion.
- Consumption Boost:
- Weak revival in consumption, especially in the lower-income categories.
- GDP growth estimated at 7.3%, but consumption growth lags at 4.4%.
- Advocacy for measures like a small cut in excise duty on petrol/diesel to stimulate consumption and curb inflation.
- Human Capital Investment:
- India's demographic advantage requires increased spending on health, education, and skilling.
- General government spending on social services expected to rise to 8.3% of GDP in 2022-23.
- Urgent need to enhance spending in comparison to global peers for meaningful employment of the working-age population.
- Rural Sector Focus:
- Rural India, housing 65% of the population, demands attention for agriculture sector development.
- Agriculture productivity is significantly lower than global standards. technology adoption and rural infrastructure crucial.
- Skilling programs to shift rural workforce to manufacturing and services sectors for sustainable rural development.
- Other Considerations:
- Importance of
- creating a favorable business environment,
- Addressing environmental concerns
- Uplifting marginalized sections of society.
- The budget sets the stage for India's economic direction,
- Focusing on fiscal discipline
- Capital expenditure
- Consumption stimulation
- Human capital investment
- Rural sector development.
- Importance of