The Union budget 2024-25 unveils an idea of Viksit Bharat spearheading towards holistic and integral development with a continuous thrust on infrastructure and capital expenditure, nurturing the startup ecosystem, fostering research and development, and focusing on clean energy and green growth.
The interim budget for FY 2024-25 was presented on Thursday by the Union Finance Minister Nirmala Sitharaman. As anticipated, the budget neither had any big announcements nor was it a populist budget, a trend the government has followed in the last ten years. However, the government did make specific announcements with a long-term vision focusing on the goal of Viksit Bharat @ 2047. Needless to say, the vision of being a developed nation by 2047 requires measures to strengthen all aspects of the society in the ‘Amrit Kaal’. On these lines, many crucial measures have been announced in the budget speech.
Keeping up with the trend of increasing capital expenditure over the last four years, the government has further increased the same by 11.1% amounting to eleven lakh eleven thousand one hundred and eleven crore rupees (Rs. 11,11,111 crore). The continuous thrust on capital expenditure will not just boost infrastructure with public money but will also encourage the private sector and help crowd in private investments. The announcements of three major economic railway corridors and the commitment to build new airports and expand the existing ones will help create efficient supply chains, drastically reduce transportation costs and make the industry more competitive. The focus on transit-oriented development and the expansion of Metro Rail and NaMo Bharat for urban transformation will further help improve the condition of cities. Cities are known to be engines of economic growth for a country with a correlation coefficient of 0.85 between urbanisation and economic growth. Thus, the measures to strengthen urban development and provide infrastructure support to cities will help reap agglomeration benefits by decongesting the cities and reducing the negative externalities. The scheme for state governments to boost capital expenditure with fifty-year interest-free loans has been extended with an outlay of 1.3 lakh crore. The continuous focus on increasing capex, known to have a multiplier effect of 4.8 in the long run, will lay the foundation for a Viksit Bharat @ 2047.
Another focus area of the Modi-led government has been to strengthen the startup ecosystem and boost research and innovation in the country.
The Union FM announced the establishment of a Rs. 1 lakh crore corpus with a 50-year interest-free loan to promote research and innovation in the sunrise domains in our country. Announced as an opportunity for the tech-savvy youth, this is expected to catalyse growth and generate employment opportunities. In continuation to the National Deep Tech Startup Policy announced a couple of months back, the FM announced a scheme for strengthening deep tech, specifically for the defence sector. This will not only help make Bharat self-sufficient, “Aatmanirbhar”, but will also boost economic growth and transform the youth from job seekers to job givers.
In nine years, Bharat has already become the third-largest ecosystem for startups in the world. To encourage the youth further and support the startups, certain tax exemptions provided to some startups have been extended for another year. With the vision of the Hon’ble Prime Minister to encourage youth to become entrepreneurs and the continuous support provided to the startups in the budget from last few years, the country is preparing a robust startup ecosystem that will not just provide employment opportunities for the youth but will lead the economic growth of the country.
Climate change and sustainability have been another focal point for the present government. From making Mission LiFE into a mass movement to transitioning the energy sector, various steps have been taken to achieve net zero by 2070. Bharat is the only G20 country that is achieving its climate goals well before the deadlines. The budget announced today focuses very strongly on energy transition. From rooftop solarization, providing 300 units of free electricity to one crore households per month, to providing viability gap funding for harnessing offshore wind energy potential, the government is leaving no stone unturned to reduce its carbon footprints. Apart from this, the FM announced setting up coal gasification and liquefaction capacity of 100 MT by 2030 to reduce imports of natural gas and a phased mandatory blending of compressed biogas in compressed natural gas for transport and piped natural gas (PNG) for domestic uses. The government further announced the expansion and strengthening of the electric vehicle ecosystem, a new scheme for bio-manufacturing and bio-foundry and schemes to promote climate-resilient activities for Blue Economy 2.0. These steps align with the government’s vision of promoting green growth for a sustainable and resilient future.
Overall, the budget announcements have made two things very clear. Firstly, the government has a long-term vision and a clear roadmap for a developed country; for a ‘Viksit Bharat’, by 2047. Secondly, the government is confident of returning to power and, thus, does not want to go for populist measures, keeping elections in mind, but rather continue pressing the accelerator on the development path. With the continuous thrust on infrastructure and capital expenditure, nurturing the startup ecosystem, fostering research and development and focusing on clean energy and green growth, Bharat is spearheading towards holistic and integral development.
Abhishek Malhotra is an Assistant Professor in the Department of Economics, Sri Venkateswara College, University of Delhi. Views expressed are personal.