Finance Minister Nirmala Sitharaman is poised to present the Union Budget for the fiscal year 2024-25 in the last week of July, according to a PTI report. The finance minister will hold pre-budget consultations with industry chambers on June 20, sources revealed on Sunday.
Pre-Budget Consultations
Industry sources indicated that the pre-budget consultation with Sitharaman will be preceded by a meeting with Revenue Secretary Sanjay Malhotra on June 18. These discussions are expected to set the stage for outlining the economic agenda of the Modi 3.0 government.
Economic Agenda for Modi 3.0
The forthcoming budget is anticipated to focus on measures to stimulate growth without exacerbating inflation. Key priorities will include accelerating reforms to transform India into a USD 5-trillion economy and achieving the status of ‘Viksit Bharat’ by 2047.
The Reserve Bank of India (RBI) projects that the Indian economy will grow by 7.2 percent in the current fiscal year, driven by improving rural demand and moderating inflation. This optimistic forecast follows the RBI’s announcement of a record dividend of ₹2.11 lakh crore for FY24.
Key Policy Priorities
The budget will likely address several critical areas:
- Agricultural Sector Stress: Addressing the challenges faced by the agriculture sector.
- Job Creation: Implementing strategies to boost employment opportunities.
- Sustaining Capex Momentum: Maintaining the momentum of capital expenditure.
- Revenue Growth: Ensuring robust revenue growth to adhere to the fiscal consolidation path.
Historical Context
Nirmala Sitharaman is set to present her seventh budget, surpassing Morarji Desai’s record of six consecutive budgets. She has already presented six budgets, including the interim budget for 2024 earlier this year, making her the only woman finance minister to serve two consecutive terms.
Interim Budget 2024 Highlights
In the interim Budget 2024, the government raised the capital expenditure target by 11.1 percent to ₹11.11 lakh crore for the fiscal year beginning April 1, accounting for 3.4 percent of the country’s GDP.
Fiscal Outlook
The Modi 3.0 government inherits a robust economy with a focus on fiscal prudence. The recent highest-ever dividend from the RBI further strengthens this position. The government’s economic policies have received positive feedback, with rating agency S&P upgrading India’s sovereign rating outlook to positive, hinting at a potential rating upgrade within the next 1-2 years, contingent on adherence to the fiscal deficit roadmap.
Challenges Ahead
Despite buoyant tax revenues, non-tax revenue remains a challenge due to the slow pace of strategic disinvestment, with few significant sales except for Air India.
Conclusion
The upcoming budget is critical as it will set the tone for the Modi 3.0 government’s economic strategy, focusing on sustainable growth, fiscal consolidation, and comprehensive reforms to achieve long-term economic goals. As the budget presentation approaches, all eyes will be on the measures proposed by Finance Minister Nirmala Sitharaman to navigate the economic challenges and opportunities ahead.
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