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Interim Budget Contributes to Long-Term Economic Growth, Expert Affirms

© AP Photo / Altaf QadriIndian Finance Minister Nirmala Sitharaman, center, holding a pouch containing a digital tablet, leaves her office along with her colleagues for President's house before presenting the federal budget in the Parliament in New Delhi, India, Thursday, Feb. 1, 2024. (AP Photo/Altaf Qadri)
Indian Finance Minister Nirmala Sitharaman, center, holding a pouch containing a digital tablet, leaves her office along with her colleagues for President's house before presenting the federal budget in the Parliament in New Delhi, India, Thursday, Feb. 1, 2024. (AP Photo/Altaf Qadri) - Sputnik India, 1920, 01.02.2024
With the general elections scheduled for April-May this year, Finance Minister Nirmala Sitharaman presented the interim budget to Parliament on Thursday. The complete budget will be presented by the newly-elected government following the elections.
Finance Minister Nirmala Sitharaman, during the presentation of the last budget of the Narendra Modi-led federal government's current tenure, said that India is currently undergoing a momentous transformation.
The finance minister said that the next five years will bring unprecedented prospects for development and significant moments to make the dream of a developed India by 2047 a reality.
Sitharaman, in her budget speech, focussed on bettering conditions for the poor, women, youth and farmers.

Key Takeaways From the Budget:

The Finance Minister said India had pulled 250 million people out of poverty in the past ten years.
Tax Regime: Tax slabs for the new and old income tax regimes will remain unchanged.
Loans For Women Entrepreneurs: The government has provided 300 million Mudra Yojana loans specifically for women entrepreneurs.
Tourism: The government will actively promote the development of iconic tourist centres in states. Additionally, to facilitate this development, long-term interest-free loans will be extended to the states.
Free electricity worth 300 units every month for those participating in the government's rooftop solar programme.
Affordable Housing: The government will build 20 million affordable houses for people below the poverty line in the next five years.
As the tenure of the current Bharatiya Janata Party (BJP)-led federal government ends in the coming months, a full budget for the financial year 2024-25 is expected to be put forward by the newly-elected government in July.
This was an interim budget which outlines the expected income and expenditure of the Centre for the upcoming financial year (31 March 2023). Interim Budgets generally do not include any significant policy changes.

Interim Budget Lays Groundwork for Economic Growth: Experts

Economic experts posit that the interim budget 2024-25, despite its limitations, sets the foundation for India’s robust economic growth.
Sharing his views about the interim budget, Sudhanshu Kumar, an economist at the Bihar Institute of Public Finance and Policy (BIPFP), told Sputnik India that while it is bound by constraints, it still signifies the government's future intentions.
“While highlighting the government's achievements in the last ten years to set the tone for the upcoming Lok Sabha elections, the interim budget 2024 has also signalled policy continuity to the different stakeholders of the Indian economy,” Kumar stated.
He further said that the budget speech highlights the confidence of the ruling party that they will return to power with a majority under the leadership of Prime Minister Narendra Modi.
In his concluding remarks, Kumar emphasised that the interim budget aims to bolster long-term growth by ramping up capital expenditure and ensuring policy certainty for both investors and consumers.
Meanwhile, Dr. Anish Shah, President of Federation of Indian Chambers of Commerce and Industry (FICCI) said that the interim budget is a clear and outcome-based continuum towards Viksit Bharat (Developed India) as it brings together growth, climate, and social empowerment, while maintaining a careful balance between the current investment rate and fiscal discipline.
“Enabling States to adopt reforms for Viksit Bharat will seize the momentum created from the Centre towards Amrit Kaal. Focus on Blue Economy, expanding and strengthening the EV ecosystem, domestic tourism, and multi-modal logistics will propel India towards the vision of a developed nation by 2047,” Shah stated.
Touching upon the announcements pertaining to the infrastructure, MSME, and housing sectors, CMD of Rudrabhishek Enterprises Limited (REPL), a public limited integrated infrastructure company, Pradeep Misra, told Sputnik India that it is highly encouraging to see that the focus on building infrastructure has continued in this budget as well.

“The Capex target increased in excess of 11 per cent [which] will directly boost the entire infrastructure sector. Expanded network of Metro Rail, Namo Bhaarat, Airports & tourism hubs will have [a] spiral effect on all other ancillary industries. Several connectivity corridors including port, cement & energy should be highly impactful, depending on the speed with which they are rolled out,” Misra stated.

However, he believes that the MSME sector may be slightly disappointed as it was hoping for policy announcements that would assist in easing regulatory procedures, reducing compliance burdens, and increasing access to loans.
Misra praised the Finance Minister for maintaining an excellent balance between growth targets, infrastructure development, sustainability goals and concerns of the common people including farmers, women and young entrepreneurs in the interim budget.
Visiting Kenyan President William Ruto, center, introduces his delegation members to Indian President Droupadi Murmu and Indian Prime Minister Narendra Modi during a ceremonial reception for Ruto at the Indian presidential palace in New Delhi - Sputnik India, 1920, 31.01.2024
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