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Interim Budget

Budget 2024

Lok Shabha

Election 2024

BJP

Analysis of India's Interim Budget 2024-25: Political Confidence and Economic Focus

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Introduction:

The announcement of India's interim budget for fiscal year 2024-25 by Union Finance Minister Nirmala Sitharaman signals the ruling BJP's mood for the upcoming Lok Sabha elections. S&P Global Market Intelligence's analysis sheds light on the political confidence reflected in the budget speech and its implications for economic policies.

Key Highlights:

  • The interim budget speech serves as a report card on the government's performance, emphasizing social welfare expansion and infrastructure development.

  • Despite modest voter-friendly spending, the government maintains focus on capital investment and infrastructure spending to crowd in private investment and sustain high economic growth.

  • Actual capital expenditure outlay increases by 11%, although it falls short of the ambitious growth target set in the previous budget.

  • S&P Global projects a GDP growth rate of 6.3% for FY2024-25, citing challenges such as rising food prices, high interest rates, and external risks.

  • The government aims to reduce the fiscal deficit to 5.1% of GDP, signaling commitment to fiscal consolidation despite challenges in meeting disinvestment targets.

  • References to Prime Minister Gati Shakti in the budget are viewed as risk-positive, indicating a focus on developing railway and port corridors to enhance India's participation in global supply chains and trade routes.

Conclusion:

India's interim budget reflects the ruling BJP's confidence and commitment to economic growth ahead of the 2024 Lok Sabha elections. While maintaining a focus on infrastructure development and fiscal consolidation, the government faces challenges such as moderating GDP growth and meeting deficit targets. The emphasis on Prime Minister Gati Shakti underscores the importance of enhancing connectivity and competitiveness to drive India's economic agenda on the global stage.

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