Interim Budget: India s manufacturing sector is being reinvented to achieve the country s ambition of becoming a $10 trillion economy. The Production Linked Incentives (PLI) scheme has played a strategic role in elevating India s manufacturing capabilities and attracting global companies. The scheme has already shown success in sectors like electronics, pharmaceuticals, and telecom. To further drive innovation, the government should extend PLI benefits to R&D investments. A dedicated PLI scheme for the chemicals sector could boost its growth and position India as a global hub. Additionally, a PLI scheme for the space sector could help India become a global leader in space technology.
The government is expected to stick to fiscal prudence in the interim budget, with a 5-10% increase in budget line item allocations. Confidence should be provided that fiscal deficit targets will be met, with reductions in food and fertilizer subsidies. Positive signaling on fiscal spend, including increased allocation for capex, is anticipated. Divestment targets are likely to be modest in the interim budget but significantly enhanced in the full budget. India s macroeconomic situation for FY 2024-25 is projected to have a GDP growth rate of 6.3-6.5%, with risks stemming from geopolitical factors.
Union Budget: The upcoming interim budget holds critical significance for India amid soaring prices, demanding strategies to curb inflation. The government grapples with measures to rein in inflation, which started the year at 6.5%. Policies targeting food supply volatility might stabilise inflation. Finance Minister Nirmala Sitharaman could introduce fiscal measures to counter rising prices and manage inflation.
In 2024, the minerals and metals industry is expected to fill production gaps and reduce dependence on imports, helped along by policy reforms and government incentives.
Union Budget: Prime Minister Narendra Modi s BJP secured significant victories in key states, indicating possibilities of keeping the government away from lavish welfare schemes in the upcoming interim budget. Modi s vision for India s future may lead to a budget prioritizing fiscal prudence over excessive spending.