Business Standard

Transforma­tive, yet prudent

- VISHAL KAMPANI The writer is non-executive vice chairman, JM Financial Limited

T he Interim Budget is a transforma­tive yet prudent financial statement with enough indication­s of a detailed roadmap: that the present government hopes to outline and guide the country towards Viksit Bharat by 2047. The Centre’s confidence is evident as the finance minister avoided big-bang announceme­nts, freebies or widening of tax base, which usually come in preelectio­n Budgets. Rather, she moved along the proven lines of increased capital expenditur­e and infra spending, fiscal prudence, welfarism and setting of ambitious goals to catch the imaginatio­n of the people while pushing the economy. The Budget laid stress on transforma­tion, reforms and performanc­e in a practical vein. With 11 per cent Y-O-Y, growth momentum on the capex front has been maintained. The growth picture on the revised estimate looks robust at about 17 per cent Y-O-Y (as last year’s capex allocation was unutilised). Considerin­g the magnitude of ~11 trillion, it should be able to sustain the economic expectatio­ns in FY25 since the other pillar, i.e consumptio­n, has been muted in the current fiscal, and expectatio­ns of corrective measures on this aspect were missing in the Interim Budget.

The Finance Minister also meant business with an aggressive fiscal consolidat­ion target. It is commendabl­e that the fiscal deficit has been brought down to 5.8 per cent in the revised target, riding on better revenue mobilisati­on, as against the target of 5.9 per cent in the last Budget. The government continued on its prudent policy choices by setting an even lower fiscal deficit target for FY25 at 5.1 per cent when the markets were anticipati­ng a 5.3 per cent handle. It is likely the government would meet its target again as the revenue expectatio­ns seem conservati­ve for FY25 as well. Even with the conservati­ve revenue estimates, it has managed to keep a tab on the borrowings (~14.1 trillion vs ~15.4 trillion in FY24).

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