A comprehensive budget: Prioritizing growth and employment

Dipak Kurmi

(The writer can be reached at dipakkurmiglpltd@gmail.com.)

 The Union Budget 2024–25 showcases the finance minister’s steadfast commitment to crafting a forward-looking, comprehensive plan for a thriving, environmentally sustainable, and technologically advanced India. Aiming to propel the nation enthusiastically into the “Amrit Kaal” era and secure its place among developed countries by 2047, the budget strongly focuses on fostering growth, promoting inclusiveness, and generating employment opportunities.

The full budget, building on the interim budget’s framework, outlines a long-term vision for Viksit Bharat. By presenting nine key priorities, it provides a clear roadmap to achieve the nation’s extended development goals while addressing immediate concerns.

The Union Budget ensures that every Indian has a role in realizing the Viksit Bharat vision. It addresses a broad range of economic challenges and impacts all sectors of society. The budget encompasses provisions for farmers, the middle class, youth, women, MSMEs, and vulnerable groups, reflecting a comprehensive approach to national development.

This meticulously crafted budget features a robust focus on agriculture and rural development. It includes a substantial increase in agricultural expenditure, which is essential for boosting farm productivity. Key initiatives such as funding for rural infrastructure, support for farmer-producer organisations and cooperatives, missions for oilseeds and pulses, development of clusters near consumption centres, promotion of natural farming, advancement in technology and agri-research, and the use of digital public infrastructure are all aimed at enhancing agricultural productivity and setting a new benchmark for socio-economic progress in the nation’s core regions.

Agriculture alone is insufficient to drive demand and create jobs. For truly inclusive growth, a focus on industry, especially labour-intensive manufacturing, is essential. Consequently, the budget’s emphasis on boosting labour-intensive sectors and MSMEs stands out as a central theme. Measures such as credit guarantees for MSMEs, increasing the MUDRA loan limit to Rs 20 lakh for borrowers who have repaid their loans, providing credit support for stressed MSMEs, establishing e-commerce export hubs through public-private partnerships to aid domestic artisans, and expanding mandatory onboarding in TReDS are designed to tackle persistent issues faced by MSMEs.

Additionally, the government’s pledge to develop investment-ready industrial parks on a plug-and-play basis, in collaboration with states and the private sector, is a significant step forward. The approval of 12 new industrial parks under the National Industrial Corridor Development Programme will offer ready-to-use infrastructure for industrial operations. Furthermore, enhancing the tech platform to improve outcomes under the Insolvency and Bankruptcy Code and advancing Jan Vishwas Bill 2.0 will streamline and simplify the business environment.

The budget’s emphasis on skills development is marked by several key initiatives, including internship opportunities at 500 leading companies, a monthly internship allowance of Rs 5,000, and a three percent interest subvention on education loans. These measures are designed to bridge skill gaps within the industry and position India as a prominent manufacturing hub.

In addition to focusing on skills development, the finance minister has introduced three new employment-linked schemes, targeting both first-time job seekers and employers, and connected to the EPFO. To boost female workforce participation, the budget includes initiatives such as establishing women’s hostels, offering women-specific skill programmes, providing office creches, and supporting self-help groups. Furthermore, an allocation of Rs 3 lakh has been set aside to benefit women.

Aligned with global trends, the budget clearly prioritizes environmental sustainability and the green economy. Initiatives include advancing energy transition through policies like pump storage, developing a roadmap for hard-to-abate sectors such as steel, power, chemicals, cement, and refining, and promoting rooftop solar installations. These measures are designed to foster sustainability and drive green growth.

The budget adopts a pragmatic stance by aiming to stimulate and revitalise urban consumption demand, which is beginning to recover. Measures such as reducing income tax rates for salaried employees, especially those in lower income brackets, increasing the standard deduction for the salaried class under the new tax scheme, and providing deductions on family pensions are designed to offer relief to the middle class. These provisions are expected to enhance their purchasing power and encourage more individuals to embrace the new income tax regime.

The budget’s foundation is built on maintaining macroeconomic stability and ensuring policy continuity, which are crucial for fostering sustained economic growth. In this regard, the finance minister deserves praise for successfully reducing the fiscal deficit to 4.9 percent for the current year, a notable improvement from the 5.1 percent projected in the interim budget for 2024–25.

The continued emphasis on capital expenditure, maintained at the same level as in the Interim Budget, underscores the government’s commitment to infrastructure development as a primary objective. The allocation of Rs. 1.5 lakh crore for long-term, interest-free loans to states will supply essential resources for capital projects, enabling them to enhance infrastructure effectively.

The Budget seeks to foster collaboration with states and stakeholders to advance next-generation reforms, particularly in areas like land and labour, which fall under state jurisdiction. It also aims to incentivize the effective execution of the Business Reforms Action Plan (BRAP) to drive progress in these crucial factors of production.

Key announcements in the Budget also highlight a focus on urban development and city modernization, ensuring tax stability, and supporting start-ups through the abolition of the angel tax. Additionally, the budget aims to enhance housing in both rural and urban areas with expanded support for the PM Awas Yojana.

Overall, the budget presents a thorough, practical, and forward-thinking approach, emphasising both growth and inclusion.