Budget 2024-25: Will it Reflect Economic Survey Cues or Follow Previous Budget Themes?

As Union Finance Minister Nirmala Sitharaman presents the Union Budget for 2024–25, all eyes are on how it will align with the themes highlighted in the Economic Survey 2023–24 or if it will echo the maiden budgets of Prime Minister Narendra Modi’s previous terms.

The Modi government’s first Budget after returning to power in 2019 with an even bigger mandate than in 2014 was by and large incremental.

Economic Survey Insights

The Economic Survey 2023–24, released Monday, outlines significant challenges and key themes that are expected to shape India’s economic trajectory. The survey points to the need for:

• Inflation Targeting: Revising the Reserve Bank of India’s framework to exclude food inflation.
• Private Sector Investment: Encouraging private sector investment to sustain economic momentum.
• Employment and Skills: Tackling unemployment and enhancing skill development.
• MSME Growth: Easing regulatory burdens and improving access to finance for MSMEs.
• Agricultural Reform: Aligning production with agro-climatic characteristics and investing in technology and infrastructure.
• Green Transition: Managing India’s shift towards sustainable practices.

Reflecting on Past Budgets

In her sixth full budget and the first of Modi’s third term, Sitharaman may draw from the broad themes of previous budgets. In 2014, Finance Minister Arun Jaitley introduced numerous schemes to signal the government’s intent to fulfill electoral promises, including Digital India and Skill India. The 2019 budget, with a focus on fiscal prudence, included measures like raising FDI caps and increasing income tax for the super-rich.

Key Expectations for Budget 2024–25

Given the cues from the Economic Survey, here are some themes and action points to look out for:

• Inflation Management: Addressing food price inflation through direct benefit transfers rather than monetary policy.
• Investment Boost: Encouraging private sector investment to take over from public investment.
• Job Creation: Emphasizing the private sector’s role in generating employment.
• MSME Support: Reducing compliance burdens and enhancing financial access for MSMEs.
• Agricultural Development: Promoting sustainable farming practices and investing in agri-tech and infrastructure.
• Sustainable Growth: Ensuring India’s transition to a green economy.

Parliamentary Discussions and Strategies

The Budget session, expected to be contentious, includes extensive debates in both the Lok Sabha and Rajya Sabha. The INDIA bloc and other opposition parties are set to raise issues like the NEET-UG paper leak and the Agniveer scheme. Meanwhile, the Telangana Assembly’s Budget session will focus on crop loan waivers and unemployment.

Conclusion

As the Union Budget for 2024–25 is unveiled, it remains to be seen whether it will incorporate the themes from the Economic Survey or continue the trajectory set by previous budgets. With significant economic challenges and opportunities ahead, this budget will play a crucial role in shaping India’s economic future.