Interim Budget Shows Govt's Confidence On Its Vikas Agenda

Interim Budget Shows Govt's Confidence On Its Vikas Agenda

The government has tried to rationalise revenue expenditure by keeping revenue deficit just by 2pc of GDP.

Staff ReporterUpdated: Friday, February 02, 2024, 06:35 AM IST
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Indore (Madhya Pradesh): Finance Minister Nirmala Sitharaman presented the Interim Budget in Parliament on Thursday, February 1. Unlike previous budgets, the Interim Budget has not made any 'spectacular or popular announcements', but it gave real and reasonable estimates about revenue receipts and nominal GDP growth of 10.5pc. It is nothing like the budget of general elections year. It shows the government's confidence to get a comfortable majority in the upcoming Parliamentary elections because of its efforts for sab ka saath sab ka vikaas. But it still is generating considerable buzz as it boosts the capex expenditure to Rs 11.1 lakh crore before the general elections. The government has tried to rationalise revenue expenditure by keeping revenue deficit just by 2pc of GDP. The government is rightly moving towards the path of fiscal consolidation by keeping fiscal deficit to 5.1pc of the GDP. The growth in GST collection and direct tax collection has created room for the expansion of capex outlay without much borrowing from the market. This will keep the government's borrowing less by Rs 1k crore next year from the market. It means more funds for the private sector at a reasonable level of interest. This will create good opportunity of growth for almost all sectors of the economy including banks.

The government is planning to boost infrastructure growth through huge capex expenditure. This alone has a huge multiplier effect on employment and on growth of other sectors of the economy. Creation of job opportunities is the most important agenda of the government. The agricultural sector has been doing reasonably well for the last few years. This has created a huge demand for agro infrastructure in the economy. The Interim Budget has rightly made good allocation for agro storage and processing facilities. The government has now realised to diversify agriculture growth to make the economy self sufficient in food to restrict food import bill. This budget has planned to boost oilseeds production by improving productivity through research and developing new varieties of seeds. The budget is good because it has not created any negative message on growth. The finance minister has appreciated the taxpayer as the number of direct tax payers who are submitting tax returns has reached more than 8 crore out of which only around 3 crore are paying income tax. The tax reduction and simplification of tax procedures can improve the tax base. We thus can expect some tax concessions in the final budget. Government revenue indicates that 90pc of the resources are now coming through tax collection. The government is thus not much bothered about disinvestment. Just Rs 50k crore is planned from disinvestment, thus giving good room for performance of public sector. The Amrut Kaal's growth of the Indian economy will be through the joint efforts of public and private sector i.e. in real sense it is sab ka saath sab ka vikaas.

Regards

Prof Ganesh Kawadia

Professor of Economics

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