A credible effort

The Budget makes all the right noises and avoids the temptation to be populist

This Budget is one of the better ones rested in the Narendra Modi era, and probably the best produced by the current finance minister. It does no harm, makes the commitment to capital expenditure clear, and tries to stimulate the economy. Despite obvious temptation, it has stayed away from any populist tendencies.

The numbers are, first of all, credible. The Budget uses nominal gross domestic product GDP) growth of 10.5 per cent as its modelling assumption. Net tax revenues to the Centre are assumed to rise by 11.7 per cent, which is a reasonable level of tax buoyancy. Both corporate and income tax collections are assumed to grow at 10.5 per cent. There is no overestimation on other revenue items as disinvestment receipts are budgeted at 51,000 crore, in line with the current year estimates, and even dividends from the Reserve Bank of India/public sector banks are at 48,000 crore, compared to 41,000 crore in FY23. This number was 21.01 trillion in FY22. Even dividends from public sector enterprises are budgeted at 43,000 crore, same as this year. These numbers are all conservative.

On the expenditure side, the big positive continues to be the focus on boosting capital expenditure. The expenditure on the capital account is budgeted to rise by 37 per cent to over 210 trillion, and the effective capital expenditure including the grants for capex) by 30 per cent. Expenditure on the revenue account is only rising by 1.25 per cent, and net of the rise in interest payments is down for the coming year. This has been enabled by the cut in subsidies,