BALANCED MIX OF PROGRESSIVE POLICIES

The Union Budget 2024-25 is the first budget of the third consecutive term of the [Modi] government.

- NILESH SHAH

On this backdrop, it provides the right ingredients for laying the foundation to help propel India to the next decade of growth aligning with the goal of Viksit Bharat. The budget outlines nine priorities including growth and employment. It is a balanced mix of progressive policies aimed at fostering job creation, boosting infrastructure, supporting agriculture and simplifying the tax structure.

The Union Budget has walked the fine balance between productive expenditure and fiscal consolidation. The targeted central fiscal deficit is set at 4.9% as compared to 5.1% set in the vote on account.

More importantly, the government continues to move on the path of fiscal consolidation seeking to bring down the fiscal deficit to below 4.5% of GDP [gross domestic product] in the 2025–26 financial year with the guidance to reduce debt-to-GDP ratio in the future.

The government announced lower net (Rs 11.6 lakh crore versus Rs 11.8 lakh crore) and gross (Rs 14 lakh crore versus Rs 14.1 lakh crore) market borrowing estimates compared to the interim Budget, led by the lower fiscal deficit estimate. At these levels, net market borrowing is likely to fall 1.5% year-on-year, at a time when nominal GDP is meant to grow 10.5% year-on-year keeping the supply-demand dynamic favourable.

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