Interim Budget 2024: A commitment to continuity & fiscal discipline

The interim Budget truly exemplifies the principle of “if it ain’t broke, don’t fix it”. With the Indian economy performing well, there is no need for any big-ticket announcements. And that’s exactly what the finance minister did. The interim Budget reflects the government’s confidence and stability with no populist measures or changes in income tax. And so, a commitment to fiscal responsibility took centre stage in what is perhaps the shortest-ever Budget speech by Nirmala Sitharaman.

It is truly noteworthy that the government chose to focus entirely on fiscal consolidation and not populism, as was expected in view of the upcoming general elections. It is a Budget that demonstrates inclusiveness in the true sense, offering moderate benefits to almost all sections of the society. 

This Budget refrained from making any extravagant populist declarations. The standout feature was, no doubt, its adherence to fiscal discipline, exemplified by the decision to cap the fiscal deficit for FY2024-25 at 5.1%. Notably, the central government’s decision to enhance capital expenditure to a robust and enigmatic number of Rs 11,11 trillion lays the foundation for a long-term economic growth.

The direct money transfers might be missing this year, but the Budget emphasises on avenues for improving employment and quality of life in rural India. While not immediately pandering to populist impulses, the Budget allocates significantly to infrastructure development and provides incentives for rural housing, agriculture and fisheries.

As in the past, ‘Nari Shakti’ continues to be in the forefront of the interim Budget. The strategic decisions to enhance incentives for rural populace, particularly women, are expected to have a lasting positive impact, enhancing sentiments over the long term. The extension of healthcare coverage under Ayushman Bharat to ASHA and Anganwadi workers, and expansion of the “Lakhpati Didi” scheme’s target to cover three crore women are big positives this year, which will go a long way in empowering rural women and enhancing the quality of life in rural India. This, in turn, would help ensure continued rural demand for branded consumer goods.

This Budget aligns favourably with companies like Dabur that have a robust rural footprint. In addition to its focus on supporting vulnerable sections of the society and aiming for a widespread implementation of schemes, there is a strong emphasis on fostering research and innovation. Significant financial allocations have been dedicated to supporting research in the private sector, offering low-cost loans. The government has decided to establish a corpus of `1 trillion, providing a 50-year interest-free loan to facilitate long-term financing or refinancing at extended tenors and minimal interest rates. This initiative is poised to have a profound impact, giving a substantial boost to the private sector and elevate their commitment to research and innovation.

Several positive strides have been made in the right direction, including the retraction of pending tax demands, emphasis on rooftop solarisation, and the commitment to providing up to 300 units of free electricity. These initiatives will surely increase the disposable income in the pockets of the consumer and fuel a surge in consumption.

The focus on next-generation reforms reflects a collaborative effort towards ensuring a prosperous future. These steps underscore a commitment to economic well-being and sustainable growth, reflecting a comprehensive approach to addressing the needs and aspirations of the new India. Stability and continuity are the key ingredients of the interim Budget as the government prepares the recipe for a ‘Vikasit Bharat’.

Mohit Malhotra, chief executive officer, Dabur India penned this piece for Financial Express

Views are personal and do not represent the stand of this publication.