Interim Budget 2024: 'A transformative yet prudent financial statement'

The Interim Budget is a transformative yet prudent financial statement with enough indications of a detailed roadmap: that the present government hopes to outline and guide the country towards Viksit Bharat by 2047.

The government’s confidence is evident as the finance minister avoided big-bang announcements, freebies or widening of tax base, which usually come in pre-election Budgets. Rather, she moved along the proven lines of increased capital expenditure and infra spending, fiscal prudence, welfarism and setting of ambitious goals to catch the imagination of the people while pushing the economy. The Budget laid stress on transformation, reforms and performance in a practical vein.

With 11 per cent YoY, growth momentum on the capex front has been maintained. The growth picture on the revised estimate looks robust at about 17 per cent YoY (as last year’s capex allocation was unutilised). Considering the magnitude of Rs 11 trillion, it should be able to sustain the economic expectations in FY25 since the other pillar, i.e consumption, has been muted in the current fiscal, and expectations of corrective measures on this aspect were missing in the Interim Budget.

The Finance Minister also meant business with an aggressive fiscal consolidation target. It is commendable that the fiscal deficit has been brought down to 5.8 per cent in the revised target, riding on better revenue mobilisation, as against the target of 5.9 per cent in the last Budget. The government continued on its prudent policy choices by setting an even lower fiscal deficit target for FY25 at 5.1 per cent when the markets were anticipating a 5.3 per cent handle. It is highly likely that the government would meet its target yet again as the revenue expectations seem conservative for FY25 as well. Even with the conservative revenue estimates, the government has managed to keep a tab on the borrowings (Rs 14.1 trillion vs Rs 15.4 trillion in FY24).

Overall, the government has presented a forward-looking Budget with enough assurances to trust it to lay down the roadmap through the full Budget and sticking to GDP (Governance, Development and Performance).

Vishal Kampani is Non-executive Vice Chairman, JM Financial Limited