Insights by: Sumit Kochar
Overview
Finance Minister Nirmala Sitharaman’s presentation of the Interim Union Budget for the financial year 2024-25 reflects a strategic and comprehensive approach by the Narendra Modi-led government to foster inclusive growth and development across various sectors. The focus on fiscal consolidation, infrastructure, agriculture, green growth, and railways underscores the administration’s commitment to addressing the diverse needs of the population.
Economic Turnaround
Under the leadership of Prime Minister Narendra Modi, India has witnessed a remarkable economic turnaround. Through transformative policies and strategic initiatives, the government has propelled the nation from a period of sluggish growth to emerge as the fastest-growing major economy. Visionary schemes such as “Beti Bachao, Beti Padhao,” financial inclusion through “JAM (Jan Dhan, Aadhar, Mobile),” and initiatives like “Make in India” and the “Skill India Mission” exemplify a commitment to holistic development.
Skill Development and Educational Initiatives
The Skill India Mission has played a pivotal role, training 1.4 crore youth, upskilling and re-skilling 54 lakh individuals, and establishing 30,000 new institutions. Significant investments have been made in institutional higher learning, with the establishment of 7 IITs, 16 IIITs, 7 IIMs, 15 AIIMS, and 390 universities, further contributing to skill development and educational advancement.
Key Contributions of the Budget:
Inclusivity and Poverty Alleviation: The government’s recognition of the significant sectors – the poor, women, youth, and farmers – reflects an inclusive mindset. Over the past decade, targeted policies and programs have lifted 25 crore people from multidimensional poverty, with efficient implementation of direct benefit transfers saving Rs 2.7 lakh crore.
Economic Efficiency and Income Growth: The budget highlights a remarkable increase in average real income by 40-50%, with per capita income rising from Rs. 68,572 in 2013-14 to Rs. 98,374 in the advanced estimates for 2023-24.
Railways and Infrastructure Development: Conversion of 40,000 normal rail bogies to Vande Bharat and the expansion of key rail infrastructure projects demonstrate a commitment to passenger safety and comfort. Along with this, introduction of major railway corridors signifies a strategic approach to decongest high-traffic areas, enhancing operational efficiency.
Tourism and Employment Generation: Encouragement for states to develop iconic tourist centres and long-term interest-free loans for tourism infrastructure projects will boost the tourism sector and create employment opportunities.
Electric Vehicles and Green Energy: Support for the expansion and strengthening of the electric vehicle ecosystem aligns with global environmental goals. Measures towards harnessing offshore wind energy and promoting the mandatory blending of compressed biogas demonstrate a commitment to sustainable and green energy practices.
Technology and Innovation: The establishment of a corpus of rupees one lakh crore with a fifty-year interest-free loan underscores the government’s commitment to fostering research and innovation in new-age technologies, driving economic opportunities.
FDI and Fiscal Discipline: The golden era of FDI inflow and negotiations for bilateral investment treaties highlight the government’s efforts to attract foreign investment, contributing to sustained economic growth. A fiscal deficit target of 5.1% of GDP for FY25 demonstrates the government’s commitment to fiscal discipline, supporting overall economic stability.
Digital Public Infrastructure: Digital public infrastructure, including Aadhaar and UPI, is recognized as a new factor of production, instrumental in formalizing the economy. Combined with social and physical infrastructure, it is propelling progress.
Healthcare: The Budget 2024 emphasizes a transformative approach to healthcare, extending Ayushman Bharat facilities to Aasha and Aanganwadi workers, establishing hospitals in all districts, and introducing cervical cancer vaccination for 9–14-year-old girls. With a substantial allocation of Rs 90,170 crore, a 13.8% increase from the previous fiscal year, the government underscores its commitment to healthcare. The focus extends to technology integration, medical research, mental health services, and collaboration with the private sector. Capacity building for healthcare professionals and strengthening disease surveillance highlight a comprehensive strategy to enhance accessibility, innovation, and preparedness in the healthcare sector.
GDP Growth
This year stands as a historic milestone for the Indian economy, undergoing a transformative journey under the NDA Government. From a phase of sluggish growth, elevated inflation, and contracting production, the government has not only fortified our macroeconomic fundamentals but has also propelled the economy towards an upward growth trajectory. India’s Gross Domestic Product (GDP) surpassed expectations by registering an impressive growth of 7.6% in the quarter spanning July to September 2023[1], as per preliminary estimates by the National Statistical Office. This robust performance not only outpaces major economies worldwide but also underscores the effectiveness of strategic policies in fortifying resilience and propelling the nation towards accelerated economic advancement.
Upon assuming office in May 2014, Prime Minister Narendra Modi inherited an Indian economy with a GDP of $2 trillion and a per capita income of $1,573.9. Under his leadership, there has been a remarkable surge, and as of now, India boasts a GDP of $3.73 trillion[2], accompanied by a significant rise in per capita income to $2,601. This substantial economic growth reflects the transformative policies and strategic initiatives implemented during Modi’s tenure.
EY India in its reports predicts that India will emerge as the fastest-growing major economy, anticipating a remarkable six-fold surge in its per capita GDP, exceeding the $15,000 mark by the year 2047[3].
Conclusion:
In essence, the Interim Union Budget for the financial year 2024-25 epitomizes the Narendra Modi-led government’s unwavering commitment to steering India towards unparalleled growth and development. The strategic allocation of resources across diverse sectors, from fiscal consolidation to healthcare, underscores the government’s dedication to inclusivity, innovation, and economic resilience. Prime Minister Narendra Modi’s transformative leadership has ushered in an era of remarkable economic growth, as evidenced by the impressive GDP expansion and a surge in per capita income. The government’s vision of ‘Sabka Saath, Sabka Vikaas, and Sabka Vishwas’ is not just a slogan but a guiding principle that has translated into concrete policies, propelling India into a position of global economic prominence. As the nation looks forward to a future marked by sustained progress, the 2024-25 budget stands as a testament to the government’s proactive and visionary approach, laying the groundwork for India’s ascent as a developed nation by 2047.
[1] Article, The Hindu, GDP surges 7.6% in Q2, goes past RBI forecast, dated November 30, 2023, available at:
[2] Article, Business Today, India’s GDP is now $3.75 trillion, says FinMin, dated June 13, 2023, available at:
[3] Press release, EY India, EY projects India to become a US$26 trillion economy by 2047 with a six-fold increase in per capita income to US$15,000, dated January 18, 2023, available at:
