Finance Minister Nirmala Sitharaman unveiled a substantial increase in infrastructure spending, reaching Rs 11.11 lakh crore, while pledging to continue reforms and steer clear of populist measures in the last Budget before the general elections. In her announcement of a vote on account or interim Budget for 2024-25, Sitharaman maintained income tax rates for individuals and corporates, along with import duties. She, however, offered amnesty for disputed income tax demands before 2014-15, providing relief to small taxpayers. Prime Minister Narendra Modi asserted that the Union Budget guarantees strengthening the foundation of a developed India, empowering the four pillars – the young, poor, women, and farmers.
Sitharaman, in her hour-long Budget speech, outlined the government’s achievements over the past decade and introduced measures to boost tourism, housing, and renewable energy. The government aims to achieve self-reliance in edible oils by enhancing domestic oilseed output and will launch a comprehensive program to support dairy farmers. Private and public investment in post-harvest activities will be promoted to boost food processing levels and farmers’ income. Application of nano-liquid DAP (di-ammonium phosphate), a key fertilizer, will be expanded to all agro-climatic zones. Sitharaman provided a glimpse of the government’s priorities in the potential third term, focusing on economic policies fostering growth, inclusive development, and resource generation. The interim Budget seeks Parliament’s authorization for spending for four months, with the full Budget for the fiscal year starting April to be presented in July by the government elected in the upcoming general elections.
While maintaining the fiscal consolidation path, the government plans to reduce the fiscal deficit to 5.1% of GDP in 2024-25. Notable announcements include rooftop solar installations at one crore households, a Rs 1 lakh crore corpus for innovation and technology, and a scheme to strengthen deep tech in the defense sector. S&P Global Market Intelligence commented that the interim Budget reflects the BJP’s confidence for the 2024 Lok Sabha elections, emphasising policy continuity and expansion. While the Budget emphasises social welfare and infrastructure development, the 11% increase in actual capital expenditure is below the growth target of 33% in the FY2023–24 Budget. The government’s infrastructure investment agenda continues, potentially reaching a record capital investment share in GDP of 3.4%. Geopolitical tailwinds favoring India are expected to play a crucial role in realising domestic infrastructure expansion.