budget 2024: The budget session in Parliament will begin from today with the address of President Draupadi Murmu. This is the last budget session of Modi government 2.0. After this, Lok Sabha elections are likely to be held in April-May. Since this budget is going to come before the elections, it will be an interim budget. This means accounting of the country’s expenditure till the elections and the formation of the new government. It is understood that before the elections, the government can give a big gift to the middle class, youth, women, farmers and the poor to strengthen the vote bank. A report on a special conversation with Dr. Sudhanshu Kumar, economist and associate professor, Bihar Institute of Public Finance and Policy.
current economic situation
The Vote on Account Budget 2024 to be presented now comes amidst encouraging achievements of the Indian economy even against the backdrop of global instability. In a developing country, there is rarely a better time or situation than now for any finance minister to present the budget. At present the Indian economy is not only growing at a faster pace than other big countries, the government treasury is also seeing a sharp increase in revenue collection.
Also, due to the leadership of a popular Prime Minister, despite it being an election year, there is no additional pressure on the Finance Minister to make extreme populist efforts through the budget in the election year. In such a situation, a broad outline of the full budget to be presented in July after the new government comes to power can also be seen in this interim budget. On the popularity scale, the emphasis of this interim budget may be on making the four castes mentioned by the Prime Minister – youth, women, farmers and the poor – an integral part of the country’s economic development. In this way, a glimpse of an outline of far-reaching thinking indicating inclusive development can be seen in the budget.
Steps towards bigger economic goals
Given the proximity of elections, major policy changes are unlikely to be made in this interim budget, yet the announcements in the interim budget are expected to signal policy continuity to accelerate economic growth. This is necessary to take the Indian economy towards the target of US$ 5 trillion by 2027-28 and US$ 30 trillion by 2047. The basis of this goal can be considered to be the many structural reforms undertaken in the last decade to strengthen the economic foundation of the country.
Under this, rapid work has been done on the development of infrastructure across the country and at the policy level, many such steps have been taken including reforming the tax system so that economic activities in the country can be facilitated. As a result of these reforms, India has emerged as the fastest growing economy among the G-20 economies. According to currently available estimates, the Indian economy is expected to grow by 7.3 percent this financial year after growing by 9.1 percent (FY 2021-22) and 7.2 percent (FY 2022-23) in the last two years.
infrastructure building initiatives
In this development journey, the central government has played a major role in increasing the total public sector capital investment for infrastructure creation by 3.3 times from Rs 5.6 lakh crore in the financial year 2014-15 to Rs 18.6 lakh crore in the financial year 2023-24. Is.
In such a situation, it is expected that the Finance Minister can use the currently available additional fiscal space to continue the strategy of increasing the government’s capital expenditure. It is also noteworthy here that various state governments have used the additional amount available as borrowing from the Center for capital expenditure, but have used their fiscal resources for other government expenses. In such a situation, the responsibility of increasing capital expenditure in the country will largely rest with the central government.
expectations of states
Given that India is the fastest growing major economy among the major countries of the world, there is a need to coordinate and collaborate with every stakeholder influencing economic activities to make India the third largest economy by 2027-28, including There is a need for conscious initiative at the level of state governments also. Under the federal structure, the role of state governments along with the Center is important in achieving the larger goal of economic development of the country.
About 60 percent of the total expenditure incurred by the central and state governments in the country is spent through the states only. Therefore, the decisions taken in the Union Budget need to be seen from the perspective of the states also. In such a situation, the expenditure of state governments and their quality is very important for the overall development of the country’s economy. The Union Budget has a major impact on the interest of the states because the revenue collection and expenditure of the Centre, i.e. the fiscal position of the Central Government, has been affecting the actual direction of the revenue and expenditure of the states. This happens more in less developed and limited resource states. In such a situation, if more assistance is given to the states to increase capital expenditure, then the entire economy will benefit from it.
further outline
In short, the current government’s policy efforts on economic development can focus on developing infrastructure by continuously increasing capital expenditure while remaining within the bounds of fiscal responsibility. This is important for continued growth in manufacturing and services as well as job creation and economic stability. At the same time, attention is also expected to be given to developing clean-energy capacity to meet climate commitments. Its glimpse is also visible in the recently announced Pradhan Mantri Suryodaya Yojana.
One pattern that is emerging from the budgets of the last several years can be said that due to the presence of a strong and stable government, instead of populist expenditure and announcements, the necessary infrastructure construction and economic activities are facilitated for long-term development. The intention to make policy efforts will also be visible in this interim budget. It is clear from the increase in revenue collection that the central government will be successful in keeping its fiscal deficit within the target and despite this there will be no shortage of economic resources for efforts to promote development. Along with providing support to various sectors, an effort to highlight the efforts of the Central Government for the people of different income groups can also be seen in this budget.