The budget’s holistic approach promises inclusive economic growth

Moreover, this has been done with attention to macroeconomic stability and fiscal prudence, adhering to a path of fiscal consolidation, with the fiscal deficit pegged at 4.9% for 2024-25, in contrast with 5.6% of GDP in 2023-24. This will open up space for private-sector participation.

Focused on all-round development measures that would generate economic opportunities for all, the budget rightly centres around nine major priority areas, including promotion of agricultural productivity, employment and skilling, inclusive human resource development and social justice, manufacturing and services, urban development, energy security, infrastructure, innovation and R&D, and next-gen reforms. 

These are critical growth drivers and addressing these diverse areas through a holistic approach holds great potential for furthering India’s economic growth and development prospects.

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The budget has a clear focus on fostering inclusivity, with specific measures aimed at enhancing opportunities for women, the youth, the poor and farmers. The adoption of a ‘saturation approach’ through the implementation of various schemes across sectors will empower and facilitate livelihood creation for many, including Indian artisans, craftsmen, self-help groups, Scheduled Tribes and Castes, and street vendors.

CII appreciates measures like the establishment of women hostels and creches with industry collaboration, which are in line with CII recommendations and will greatly encourage women’s participation in the workforce. 

The new initiative to provide internship opportunities to 10 million youth over the next five years with placements in 500 leading companies is expected to strengthen skill development and boost employability.

Announcements such as the promotion of farmer producer organizations (FPOs), cooperatives and startups for vegetable supply chains and the implementation of Digital Public Infrastructure (DPI) in partnership with states should promote sustainable development of the agricultural sector by enhancing productivity and building resilience. 

The budgeted outlay on agriculture and allied activities increased from ₹1.4 trillion in the previous budget (revised estimate) to an estimated ₹1.47 trillion.

Boosting employment and employability was rightly given utmost priority in this year’s budget. The announcement of three employment-linked incentive (ELI) schemes for first-time workers, job creation in manufacturing and support for employers are in line with CII recommendations. 

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These three schemes, together with a new centrally sponsored scheme and internship opportunity for youth, are expected to support 41 million beneficiaries. Measures to boost tourism with a focus on spiritual and cultural heritage are also expected to spur jobs growth.

The strategic focus on MSMEs would strengthen the sector and is welcome. Tech and financial support to this vital sector are imperatives, as it has significant potential to step up innovation and support inclusive development. 

The decision to reduce the turnover threshold of buyers for mandatory onboarding on the TReDS (Trade Receivables Discounting System) platform from ₹500 crore to ₹250 crore is laudable.

Further, the introduction of an assessment model for credit based on one’s digital footprint, a new mechanism to provide financial support during stress periods and the enhancement of the loan limit under the Mudra scheme, along with a slew of other measures, will stimulate the MSME sector. The setting up of e-commerce export hubs through the public-private partnership approach will enable internationalization of MSMEs.

Infrastructure continued to be a core budget focus. The government’s announcement to provide long-term interest-free loans to states to the tune of ₹1.5 lakh crore for developing infrastructure will attract investments and boost job creation. 

The financial package includes infrastructure projects in Bihar as well as financial assistance for reconstruction in disaster-affected states. The emphasis on creating economic opportunities and all-round development of eastern India under the Purvodaya initiative could play a catalytic role in realizing India’s vision of a Viksit Bharat by 2047.

This year’s budget also saw major tax announcements. The simplification and rationalization of the tax-deducted-at source (TDS) structure is expected to reduce litigation and ease the administrative burden. Decriminalization of TDS-payment delays is a business-friendly move and also in line with CII recommendations. 

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The increase in income-tax standard deduction and revision of tax slabs under the new regime will boost disposable incomes and could drive higher consumption and demand in the economy.

The abolition of ‘angel tax’ has been a long-standing CII ask and this move will encourage startups and entrepreneurship in the country, while fostering an innovation ecosystem.

Measures such as installation of rooftop solar plants, promotion of pumped storage projects and the focus on R&D in nuclear energy, etc, will enhance energy security and enable a just energy transition. These are steps in the right direction which will help India achieve its Sustainable Development Goal targets.

Overall, this year’s budget focuses on comprehensive measures that are expected to benefit diverse sectors of the economy and help India chart an inclusive and sustainable growth path. 

Its focus on critical growth drivers such as infrastructure, employment, MSMEs, the rural economy, urban development, women and youth will catalyse all-round economic development, while helping realize India’s goal of becoming ‘Viksit Bharat’ or a developed nation by 2047.

The author is director general, Confederation of Indian Industry (CII).