(Reuters) -India’s Finance Minister Nirmala Sitharaman promised economic reforms to drive growth in a speech on the government’s budget on Thursday, the last before a national election due by May.
The interim budget for 2024/25 is being seen as an economic manifesto for Prime Minister Narendra Modi’s ruling party and will give clues to the market on its plans for fiscal consolidation, borrowings and future taxation policy.
COMMENTARY
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
“The budget delivered on the consolidation and capex theme, by not only expecting the FY24 deficit to fare better than budgeted but also pegging the FY25 goalpost at a narrower-than-expected (level of) 5.1% of GDP. By extension, gross and net borrowings are much lower than FY24 providing significant relief to the domestic debt markets.”
“Despite the welfare focus on women, youth, poor as well as farming community, the government avoided outright populist measures.”
GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA CAPITAL, MUMBAI
“The budget is well grounded covering all important sectors, while balancing the electoral compulsions. It is high on optics, low on spending impact as fiscal consolidation remains paramount focus.”
“The focus on the power sector, including new energy, railways, defence and affordable housing is encouraging, although 11% capital spending growth is much lower than 30% seen on average in last three years.”
“The budget lacks consumption triggers. Thus, is a departure from the previous pre-election vote on accounts.”
“The market will have to re-align to the new reality of lower growth in capex hereon as FY26 fiscal deficit target is the priority.”
MANOJ PUROHIT, PARTNER & LEADER – TAX & REGULATORY SERVICES, BDO INDIA, MUMBAI
“The government has continued its support to farmers under the crop insurance facility and intends to further strengthen the same. This will ensure penetration and awareness around insurance in rural India thereby providing a boost to the insurance industry.”
RAJESH NARAIN GUPTA, MANAGING PARTNER OF SNG & PARTNERS, ADVOCATES & SOLICITORS, MUMBAI
“Huge incentives to the private sector for innovations by creating a new fund exceeding one lakh crore and further a deep focus on infrastructure development by increasing the overall provisions as well as steps being taken towards rural, women and farmers development are astounding steps which will accelerate India becoming a developed nation.”
MANMEET KAUR, PARTNER, KARANJAWALA & CO, DELHI
“The government’s plan to assist states in developing ‘aspirational districts’ and focus on eastern India’s development is a welcome move.”
“Solar energy’s expansion is going to get a boost with the announcement of rooftop project which will provide for free electricity of 300 units per month and from solar surplus.”
“More support to electric vehicles will generate more jobs for vendors/youth in the sector of eclectic installation and maintenance.”
(Reporting by Dhanya Skariachan, Sarita Chaganti Singh, Hritam Mukherjee, Rama Venkat, Kashish Tandon; Editing by Eileen Soreng)
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