Indore (Madhya Pradesh): Finance Minister Nirmala Sitharaman presented her record seventh consecutive Union Budget 2024-25 which tends more towards politics and less on economics.
She tried to make it more populist by introducing lots of schemes for rural development, rural housing and infrastructure development, skill development for creation of jobs, agricultural diversification for inclusive growth.
Central outlay of Rs 2 lakh crore comprehensive internship scheme for one crore youths in top companies to enhance skill development is a welcome step to integrate higher education with industry. Enhancement towards social and welfare schemes will increase the flow of money in the hands of weaker group and will act as a multiplier effect on development. The finance minister is lucky of having more fiscal space due to good tax collection, good dividend from RBI and good cash balance from last year mainly because of limited economic activities due to election.
This space could have been used to push growth for amrut kaal. But unfortunately the budget does not mention of amrut kaal and development vision of 2047. Minor changes in direct taxes will certainly give some relief to middle income group.
Increase in short and long term capital gains tax will discourage the entry of retail investors into the capital market which cannot be taken as a good sign for broad based development. Custom duty reduction on gold and silver will help in formulating the gold market but this can increase the flow of savings into unproductive channels. No change in capex size and fiscal deficit is an indication of fiscal consolidation which can be taken as a good indicator for economic stability.
