Nirmala Sitharaman is all set to present the interim budget for 2024-25 on February 1. She was unwavering in her resolve to follow the roadmap laid by Narendra Modi when she said the focus will be on the four groups of the youth, women, farmers and the poor. It is not surprising given that the four demographic groups will surely hold significant sway over the outcome of the upcoming general elections.
At a time when levels of unemployment and inflation are ruling high, the government’s focus on the youth is reasonable. Everyone will welcome the government’s efforts on creating opportunities for the youth through skills training and such. In order to help improve farmers’ income, the government may want to look at the latest technologies and new markets. Welfare schemes on housing, water and electricity look unavoidable.
The retail inflation, as projected by the Reserve Bank, is likely to remain way above 5 percent. Food inflation is going to be a much bigger concern. On the other hand, the youth may be looking for good news on the employment front. With many IT giants slashing manpower, there are concerns across the country. Meanwhile the GDP growth is bringing some smile back on everyone’s face. RBI governor Shaktikanta Das recently said the Indian economy is likely to hit a record growth rate of 7 percent in the next fiscal. He believes the inflation is steadily moderating and that RBI is confident of achieving the 4 percent target without much delay.
Indian companies are hoping to see more funds for infrastructure development and measures to boost manufacturing in the Interim Budget. In their submissions before the budget, industry associations have asked for continuing the thrust on capital expenditure. Industry group CII, for one, has requested that capital expenditure be increased by a fifth to Rs 12 lakh crore over last year’s allocation.
Interestingly, it has also asked the Centre to expand support to state capital expenditures in the form of interest-free, 50-year loans to the tune of about Rs 30,000 crore. This may be the best opportunity for a while to turn the focus back on the electorate. There is talk of providing relief on fuel prices and taxes. A judicious mix of economic reforms and social schemes will give the interim budget a respectable look.