Union Budget 2024:Overview of India’s Economic Strength and Growth

Finance and Corporate Affairs Minister Nirmala Sitharaman presented the Interim Union Budget for 2024-2025. The budget anticipated a robust 7.3 percent growth in India’s Real GDP for FY 2023-24 aligning with revised projections by the RBI and showcasing the country’s economic resilience amidst global challenges.

A significant aspect of the budget is the allocation of capital expenditure, witnessing an 11.1 percent increase to Rs. 11,11,111 crore, constituting 3.4 percent of the GDP. The fiscal deficit for 2024-25 is estimated at 5.1 percent of the GDP in line with the government’s commitment to fiscal consolidation.

The Finance Minister also highlighted the positive transformation of the Indian economy over the last ten years with a focus on ‘SabkaSaath’ and the empowerment of 25 crore people. The pursuit of ‘Viksit Bharat’ by 2047 is a central theme of the interim budget with announcements addressing housing, solarization, and infrastructure development.

Some Key Notes on Interim Union Budget 2024-2025

Entrepreneurship

Under the PM Mudra Yojana, 43 crore loans totaling Rs.22.5 lakh crore have been sanctioned to fuel entrepreneurial aspiration. And, it is noteworthy that 30 crore Mudra Yojana loans have been specifically allocated to women entrepreneurs.

The Pradhan Mantri Kisan Sampada Yojana has also proven to be beneficial for 38 lakh farmers, contributing to the generation of 10 lakh employment opportunities. Additionally, the PM Formalisation of Micro Food Processing Enterprises Yojana has provided support to 2.4lakh Self-Help Groups (SHGs) and 60,000 individuals by facilitating credit linkages.

Commenting in support of entrepreneurship, economic growth, innovation, and MSMEs Madhusudan Ekambaram, Co-founder and CEO of KreditBee said, “I applaud the government's steadfast commitment to fostering comprehensive and inclusive development. Initiatives such as PM Mudra Yojana, Fund of Funds, Startup India, and Startup Credit Guarantee Schemes are effectively nurturing the entrepreneurial spirit nationwide. It is truly inspiring to witness a visionary approach that extends beyond mere economic growth, to transform India into a Viksit Bharat by 2047. The proposed measures, including tax reductions, specialized support for developing industries, and augmented infrastructure spending in the forthcoming Budget 2024, are encouraging signs for the future, reflecting a collective endeavor towards sustainability, growth, and innovation within India's dynamic startup ecosystem.

The reinforcement of the financial sector has significantly enhanced the efficiency of savings, credit, and investments. Ensuring timely and ample financial support, leveraging relevant technologies, and providing appropriate training for Micro, Small, and Medium Enterprises (MSMEs) are pivotal policy priorities for the government. This strategy aims not only to foster their growth but also to enhance their global competitiveness. Aligning the regulatory environment to facilitate the expansion of MSMEs will be a crucial aspect of this comprehensive policy framework.”

Railways and Aviation Sector

In the realm of railways, the government plans to implement three significant economic corridor programs

• Energy, Mineral, and Cement Corridors
• Poor Connectivity Corridors
• High Traffic Density Corridors

Additionally, a substantial improvement in safety, convenience, and passenger comfort is envisioned by converting forty thousand normal rail bogies to Vande Bharat standards.

While in the aviation sector, there has been substantial growth with the number of airports doubling to 149. Presently, 517 new routes facilitate the transportation of 1.3 crore passengers. Indian carriers have proactively initiated the procurement of over 1000 new aircraft reflecting a positive trend in the sector.

"Budget announcements show the government’s commitment towards long-term social and infrastructure development while ensuring that fiscal discipline is maintained. 

The fiscal deficit for FY’24 will narrow to 5.1% from the revised 5.8% for FY’24. Capex outlay for next year increased by 11.1% to Rs 11.1 lac Cr. Three new railway economic corridors announced will help with faster freight movement and reduce logistics costs. Setting up a corpus of Rs 1 lakh crore with a 50-year, interest-free loan will help the private sector to scale up innovation in sunrise domains. Focus on developing and promoting iconic tourist centers. A housing scheme for the middle class to build & own their own houses was announced to boost inclusive growth. All these schemes will have a multiplier effect on the economy in coming years," said Sapna Narang, Managing Partner, of Capital League. 

IT sector

Sitharaman has declared that a golden era awaits tech-savvy youth as a corpus of one lakh crore rupees will be established, offering a fifty-year interest-free loan. This corpus aims to provide long-term financing or refinancing with extended tenors and low or even nil interest rates. The initiative is expected to stimulate the private sector to scale up research and innovation significantly, particularly in emerging domains.

“While the Interim Budget provides a wide overview of FY24-25, we applaud the government's emphasis on empowering the youth through upskilling and reskilling initiatives. The establishment of additional IITs, IIITs, and IIMs is a promising stride toward creating a skilled talent pool in the IT sector, addressing a critical need in the industry especially in the era of Artificial Intelligence.

As an MSME in the IT sector, Ishan Technologies appreciates the government's recognition of the importance of timely finances, relevant technologies, and training for the growth and global competitiveness of MSMEs. The orientation of the regulatory environment to facilitate the growth of MSMEs is a crucial element of the policy mix, and we look forward to the positive impact it will have on the MSME ecosystem.

As we look forward to the budget announcement in July, we anticipate a focused commitment to bolstering cybersecurity measures. We believe that additional allocation and specific policies in this crucial area will play a pivotal role in fortifying India's digital infrastructure and enhancing overall cybersecurity, aligning with the nation's vision for a secure and resilient digital future,” said  Pinkesh Kotecha, MD & Chairman, Ishan Technologies.