Budget 2024 Live Updates: Record capex for railways, roads & income tax relief likely from FM Nirmala Sitharaman’s Union Budget
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Union Budget 2024 Live: ‘India’s future growth will be a unique experience in itself’
Budget 2024 expectations: “The Survey projects a medium to long term growth in the range of 6.5% to 7%. This will require a real investment rate of about 35% to 36%. Correspondingly, a real saving rate of 33% to 34% would be required. This appears to be feasible given current saving and investment rates. However, the growth needs to be sustained at this rate over the next two to three decades which would be facilitated by suitable policy interventions. The Survey highlights that this policy orientation should be characterized by six desirable features: (1) an emphasis on employment oriented private sector investment, (2) focus on greening of growth, (3) supporting MSME growth especially through improved access to credit, enhanced physical and digital connectivity, and a better regulatory environment, (4) continuing to rely on agricultural growth supported by better technology and climate friendly policies, (5) continued emphasis on education and skill building, and lastly, (6) increased productivity of the state sector.
In the context of inflation management, the Survey calls for a review of the present inflation targeting regime, broadly arguing in favour of recasting the target focused on non-food CPI inflation. Since recent pressure on CPI inflation was largely driven by food inflation, this modification in inflation management might facilitate easing of interest rates and thereby make monetary policy more growth oriented.
India’s medium to long term growth, according to the Survey, will be facilitated by keeping the general government debt within sustainable limits which under the FRBM is specified at 60% of GDP. This calls for a steady reduction in government debt to sustainable levels. Global economic conditions will not be conducive to an export-based growth strategy. India’s future growth will be a unique experience in itself largely based on domestic consumption and investment demand. However, going forward, India’s services exports may continue to have a competitive advantage,” says Dr. DK Srivastava, Chief Policy Advisor, EY India.