The speech is a kind of self appraisal or report card of the government. The revised budgetary estimates of macro indicators, are stimulating despite the gloomy global outlook. Amongst them, the path of fiscal rectitude and an effort to contain the fiscal deficit within the tolerance limits, is laudable. This will go long way in containing the inflationary pressure in the economy, without compromising the growth rate.
Emphasizing the achievements of the Modi government over the past decade, the Finance Minister’s speech touched upon not only on macro-economic indicators but also all sectors of the economy, alongside highlighting the priority sectors, such as agriculture, oil seeds production, dairy production, Technology etc.
The Hon’ble Finance Minister during her speech coined a new expanded form for term ‘GDP’ i.e. ‘Governance, Development and Performance’. India’s GDP clocked a growth rate of 7.7% between April 2023 and September 2023, which is highest among all the major economies. India is expected to become the third-largest economy in the world with a GDP of USD 5 trillion in the next three years and touch USD 7 trillion by 2030 on the back of continued reforms. It is expected that the India’s GDP will grow at 7.3% for fiscal year ending 31st March 2024. This specie of growth is not practically feasible with the contributory growth in Foreign Direct Investment (“FDI”) and prudence over fiscal deficit.
India’s FDI stood at USD 70.97 billion for fiscal year ending 31st March 2023. The Hon’ble Finance Minister highlighted that the remarkable inflow of FDI) over the past decade, and lauded the government’s efforts, emphasizing that FDI during fiscal years 2014-2015 to 2022-23 had doubled which amounts to USD 596 billion as, compared to the preceding period from 2004-2005 to 2013-2014.
Such influx of foreign capital signals investor confidence in India’s economic prospects and underscores the nation’s growing prominence as a favored destination for global investments. The Hon’ble Finance Minister for the first time categorically blew the whistle by announcing India as the “Developed India” marking a new era of development and governance.
Another notable achievement of the government, is the fiscal discipline. The revised budgetary estimate of fiscal deficit is pegged at 5.8% of the GDP for fiscal year 2023-24, with the aim to contain it to 5.1% in fiscal year 2024-25. This has clearly indicated the government fiscal prudence, which is largely attributed to robust tax collection.
The budgetary figures paint a comprehensive picture of the nation’s financial landscape. With total receipts estimated to reach an impressive INR 27,560 billion, including tax receipts of INR. 23,240 billion for current fiscal year ending 31st March 2024. Continuing with buoyancy in fiscal year 2024-25, the government forecasts a rise in total receipts to INR. 30,800 billion, with corresponding total expenditure projected at INR 47,660 billion. Tax receipts are estimated to climb to INR 26,020 billion.
Moreover, the budget announcement highlighted the government’s commitment to strengthen the Goods and Services Tax (‘GST’) framework, with doubled GST collections and improved state GST revenues indicating a buoyant economic environment.
One of the hallmark announcements of the budget pertains to the substantial investment earmarked for infrastructure development, with an impressive 11.1% increase in the outlay for the upcoming financial year, aiming to bolster the country’s growth trajectory and enhance competitiveness on the global stage. This manganous investment surge, would be equivalent to 3.4% of the GDP, underscores the government’s unwavering commitment to robust infrastructure development.
Source: Barandbench
