A growth-oriented Budget that aims to reduce fiscal deficits and counter inflation

No, Finance Minister Nirmala Sitharaman did not run away with the ball. This is for an interim budget and vote-on-account with its constraints and conventions. Everybody kept their remarks short, from Sitharaman to the prime minister. Many other government bigwigs didn’t speak on the interim budget at all, leaving it to the denizens enjoying the CII lounge. Still, like a good shepherd, the government, acutely aware it has the fastest-growing economy in the world now, intends to keep it safe, with all its gains intact. It also aims to keep all its emphases and thrust areas on course and has upped the ante slightly in all of them. There is an effort to broad base the growth drivers to various other parts of the economy, such as dairy farmers, fisheries, housing, Rs 600 crore more for the hydrogen mission, Rs 8,500 crore more to Solar, more aviation and aeroplane orders and more airports. This is in addition to the main thrust areas of infrastructure and connectivity, like roads, railways, bridges, metros and ports. Include therefore the people-friendly many yojanas, with several mentions of Nari Shakti with attendant incentivisation. The BJP must be surveying the reception to such yojanas for efficacy, but for the media-reading public, much of it appears like a propagandist jamboree that somehow delivers more BJP votes. Playing it close to the chest is practically DNA to the top brass. There is now a general call for greater private sector participation in various areas to introduce competitiveness, efficiency, design, and style. But, apart from the bigwigs, we cannot be sure whether they will attend. Congress will carve on crony capitalism, but why don’t they get one of their own to come forward? The habit in the private sector is to ask for interest reductions and other concessions, never mind what it does to the budget deficit. They could miss the bus, of course, with the Sarkar continuously doing all the heavy lifting. But, as Nadir Godrej said, the private sector will first build additional capacity, if required, in whatever they are involved in. Unsaid is the fact that the last time the private sector went into infrastructure, the projects were stuck for funding, as were their bills. But this was when their favourite ideological UPA government was in charge, corrupt but ruling, and well before Modi Raj began in 2014. The development of Lakshadweep has been mentioned here for both tourism and strategic reasons, most prominently for the first time. Manufacturing, slated to grow into another 5 per cent of GDP, will get a basic, enabling thrust with a large sum of Rs 1 lakh crore for research and development (R&D) for the first time. It is repayable in 50 years, making it practically a grant. With automobiles accounting for about 50 per cent of manufacturing in India, this R&D funding could come in handy for the development of components and other items in the value chain, both for industry consumption and export. Companies like Volvo, Mercedes, Audi, BMW, Toyota, Suzuki and Hyundai, which are ensconced in automobile manufacturing and assembly in India, need to be further encouraged to become global hubs operating out of India. Will the government take Arvind Panagariya’s advice in July and lower tariffs at least in line with the ASEAN countries? The overall logistic costs are to be brought down from 14 per cent to about 8 per cent with the ongoing efforts of this government on road, rail, air, and port infrastructure. This is commendable and dramatic because it is now credible and will have profound consequences for the confidence generated amongst foreign investors in India-based manufacturing and exports. The stress on government capex continues; another Rs11.1 lakh crore will be allocated. This was the biggest announcement and it is indeed less than the Rs13 lakh crore it should have been if the momentum of the present fiscal was to be maintained into 2024–25. However, the sector accounts for almost 4 per cent of GDP now and is the main growth driver. The government is cutting its market borrowing programme in fiscal 2024–25 to reduce its debts as private sector investment increases compared to before. This indicates greater confidence in the economy. Some of the government’s friends, big boys all, are not afraid. Meanwhile, the government’s fiscal deficit, at 5.9 per cent, is to be reduced to 5.1 per cent in 2024-25, en route to meeting the target of 4.5 per cent in FY 2025–26. Will this 5.1 per cent hike lead to interest rate cuts? RBI Governor Shaktikanta Das, most likely, will not react to intentions and wait for the attainment of 5.1 per cent first. All changes in direct and indirect taxes remain untouched for now, but the implication is that there may be some benefits announced in the full budget of July 2024. The prominent mention of rooftop solar for one crore households to generate 300 units of free electricity with connectivity to sell overages has enthused energy stocks such as IREDA, Websol Energy, Suzlon Energy, and Sterling and Wilson. However, this initiative may do better in the countryside and with new construction in smaller towns and cities. The technology associated with solar panels also needs to evolve. Likewise, electric vehicle (EV) stocks rallied on the reiteration of the adoption of EVs in public transportation. India is also working hard on green hydrogen technologies as an alternative to EVs. Interestingly, divestment targets, after the success of returning Air India to the Tatas, have actually been reduced. There are more important things for the government to concentrate on, with a dramatic turnaround in many PSU stocks connected with aatmanirbhar initiatives and defence manufacturing. The middle class will be helped to build their own houses or purchase their dwellings. But there is no indication that the government intends to ramp up the real estate sector in general, despite its potential to become a massive employer of skilled and unskilled jobs, if it goes up from $120 billion at present to $1 trillion by 2030. Millions of people, men and women, from the rural surplus could be absorbed, apart from those who go into management, sales, and so on. It would need incentives, loans and industry status. Small disputed income tax demands, some going back to 1962 and subject to much contention, have been withdrawn for up to Rs 25,000 till FY 2009-10 and Rs 10,000 up to FY 2014–15. This is a welcome thing, but a curious and somewhat trivial item to introduce here. Defence and railway stocks declined somewhat, probably not excited by the steadiness of the gait. Where are the huge bumps in expenditure? However, the announcements showed that investments are slightly enhanced and are continuing. Railways will get more trains. As defence manufacturing gets more money, the budget is up by 4.4 per cent. Unexpected money is going into solar, EVs, Nari Shakti, and middle-class housing, and all this has been well received. The large-scale induction of the female population into the workforce could add 1 to 1.5 per cent to the GDP. Can this be achieved in the period 2024-29? The author is a Delhi-based writer. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost_’s views._ Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook ,  Twitter  and  Instagram .