A Growth Push, And A Nudge To Salaried Class

FM has done well to stick to the path of fiscal consolidation, but whether people will move to a new default tax regime will depend on some factors

It has been clear for some time that the 2023-24 Union Budget was not going to be a pre-election exercise. The fiscal consolidation that was hard fought over the past few years was not going to be flung away for some imagined gains at the poll hustings. True to form, the Union finance minister has managed to pull off a rare feat of pushing the pedal on capital spends, reining in the fiscal deficit to 5.9% of the Gross Domestic Product GDP) for fiscal year FY) 24, yet creating a buzz among the salaried class about a potentially viable lower tax regime.

The Budget has continued with the growth push, hiking the capital spending to 210 lakh crore, 3.3% of GDP. Each rupee of capex translates to about 23 in a ripple effect in the economy. A bulk of this money is directed at long-term infra projects whose payback comes after a lag. Add this to a wide range of reform measures and the 50 basis points that digitisation-driven efficiency is likely to add to GDP, and the Indian economy seems primed for growth in the next decade. At a nominal growth rate of 12%, India will hit the 10-trillion mark as early as FY2032, becoming one of the top three global economic powers.