Union Budget 2024-25: Focus on Economic Transformation and Job CreationUnion Budget 2024-25: Focus on Economic Transformation and Job Creation The upcoming Union Budget 2024-25 aims to strengthen India’s vision of a ‘Viksit Bharat’ by 2047. The budget will focus on boosting job creation and building upon the economic progress made in the past decade. According to a report released on Friday, the government will prioritize job creation through increased investment in infrastructure and public welfare schemes. Off-balance-sheet structures may also be utilized for fiscal expansion. The budget will likely strike a balance between capital expenditure (Capex) and addressing rural challenges. While Capex spending on key sectors like roads, energy, and railways will continue, there may be some cutbacks to accommodate increased social welfare initiatives. The report projects that the budget deficit will remain below 5.1% in fiscal year 2025, with a target of 4.5% in fiscal year 2026. Key points to note: * The budget will support the ‘Viksit Bharat’ narrative with a focus on economic transformation. * Job creation is a top priority, with potential impetus for infrastructure development and public welfare schemes. * The government may allocate funds to address rural challenges and provide relief to the lower income segments. * Capex spending will continue, but there may be adjustments to accommodate social welfare priorities. * The budget deficit is expected to remain below 5.1% in fiscal year 2025, aligning with the government’s fiscal consolidation plan.
New Delhi, July 12
The Union Budget 2024-25 will strengthen the ‘Viksit Bharat’ narrative by 2047 and boost job creation, following the transformation that has taken place on the economic front over the past 10 years, a report released on Friday showed.
The government’s broad focus will be on job creation. This could mean more impetus for infrastructure and other public welfare schemes, as well as fiscal expansion using off-balance-sheet structures, the Axis Securities report said.
On Thursday, Petroleum and Gas Minister Hardeep Singh Puri hailed an SBI study that found that as many as 12.5 crore jobs were created in the fiscal years 2014-24, a four-fold increase from the 2004-14 period when around 2.9 crore jobs were created.
The impact of the Union Budget on the stock market has declined significantly in recent years as the government implemented most of the reforms outside the purview of the budget.
“We believe that the Budget at this juncture is likely to cement the ‘Viksit Bharat’ narrative by 2047, following a transformation similar to that of the past decade,” the report said.
After the formation of the NDA 3.0 government, there is growing market expectation that there will be an allocation to the lower echelons of the pyramid to address rural challenges, besides some cutback in Capex spending.
“At this juncture, the Budget is likely to strike a balance between Capex spending and addressing rural challenges,” analysts said.
Nevertheless, a higher than expected dividend from the RBI has provided some cushion to move further towards social welfare.
The government is likely to go ahead with the Capex plan announced in the Interim Budget, pegged at Rs 11.1 lakh crore. The unwavering focus on roads, energy, urban development and railways will create significant economic multipliers in the long run.
Moreover, the scope of existing PLI schemes is likely to be expanded to more sectors that can generate more employment, the report said.
“Given that tight monetary policy and high inflation have affected purchasing power across a large part of the country, we expect the budget to provide relief to those at the bottom of the pyramid,” the report said.
The government is likely to continue to support this sector by proactively providing subsidies for food and fertilizers.
The report expects the budget deficit to remain below 5.1 percent in fiscal year 2025, with a target of 4.5 percent in fiscal year 2026.
