Name of the Author and Affiliation:
LAKSHITA MAHAJAN, INSTITUTE OF LAW, NIRMA UNIVERSITY.
Abstract:
The budget has been an ambitious blueprint supporting growth in the economy and also to help the government deal with many important challenges lying ahead. Well, infrastructure, digital innovation, green energy, and skilling have been quite representative, showing commitment toward leading India toward sustainable development as well as a strong digital economy. In these circumstances, the real test comes in trying to balance fiscal discipline with social equity while the world is increasingly pressed under inflationary pressures, as well as geopolitical tensions.
The 2024 budget of India has thus been framed in the backdrop of ambitious economic goals: being a $5 trillion economy and a global hub for technology, manufacturing, and innovation requires optimistic but pragmatic fiscal policies. The budget has been shaped as a catalyst for long term transformation in the economy with a focus on key sectors and systemic bottlenecks. The essay takes upon the task of investigating the principal growth drivers in the budget for 2024; challenges, sectoral implication, financial market implication and social equity consideration in light of the same budget.
Keyword: Budget 2024, Economy, India, Growth, Challenges, Development
Introduction:
That is to say, this national budget, still one of the prime determinants of its economy, holds within it a defining direction in terms of what should be focused on: just how deep the crises are influencing the course of development, could be solved. This budget, therefore, 2024, will be very crucial for India’s building process since it works toward such bold growth figures, besides rather pressing issues about infrastructure, digital transformation, and environmental sustainability.
For the Indian government, balance in 2024 comes between growth and resilience. The budget makes infrastructure development an engine to boost connectivity, cut on logistical costs, and create employment-generating activities. It recognizes India as a global tech hub, makes innovation, and equipping the young workforce with appropriate skills necessary for competitiveness.
For green energy, it does not just end here. By funding renewable projects that help the country go further and far from the usage of fossils, the 2024 budget has proven its commitment to sustainability. Indian energy security is in tune with global climate priorities.
Still, challenges stare at the budget-the difficult tasks that lie ahead for the process in getting to sustainable macroeconomic stability-present a test from critical fiscal deficit and inflationary pressures. The budgets genuinely conceived must be taken forward through so that growth, with a touch of greater inclusion and an economy resilient enough to absorb both domestic as well as global stress factors, could be ushered in. Therefore, this 2024 budget would thus, in many ways, remain a road map for the country’s growth, equity, and sustainability and therefore one big step toward India’s economic journey forward.
Growth Drivers of the 2024 Budget:
- Infrastructure Development
The infrastructure sector is the most highlighted area of the 2024 budget, with huge capital expenditure for the improvement of transportation networks, utilities, and public facilities. Roads, railways, ports, and airports will see major investments to reduce the cost of logistics, improve connectivity within the states, and create millions of jobs, especially in construction and allied sectors.
These will reduce the trade routes, increase the competitiveness of Indian products, and attract FDI. Improved transportation infrastructure will reduce congestion in cities and make more sustainable forms of urbanization possible. Better infrastructure supports social welfare because reliable transportation makes available access to health, education, and employment opportunities specifically in rural and semi-urban areas.
- Digital Economy Boost
The budget for 2024 consists of extensions in digital infrastructure. Therefore, it describes what the government’s intent in terms of building a society that is inclusive in technological terms is. Investments of the financial services sector with digital public infrastructure, from broadband connectivity and 5G to e-governance platforms, are toward improving financial inclusion, providing public service delivery efficiencies, and increasing productivity in sectors.
This encompasses technology, e-commerce, and even finance in growth sectors for India to give this budget. Digital India initiatives include taking governance online, availability of services, and improving ease of doing business and investment into the tech sector. A dynamic digital ecosystem further enhances the reach and productivity of SMEs, thus promoting grassroots entrepreneurship and innovation.
- Green Energy Projects
It remains the key part of global sustainable goals that budgetary propositions of 2024 hint the major investment in the Green Energy. This entails developing infrastructure for solar and wind and electric vehicle. As far as the budget pertains to clean sources of energy, it supports its commitments towards climate under Paris Agreements with a notion so that India, considered one of the economies globally should not be too vulnerable from fossil fuels which turns less responsive to global shock arising from oil price flailing.
Policies toward green energy are believed to bring investment in clean technologies, improve job formation in clean tech, and energy access with affordability for the citizens of India. It has launched incentives for electric vehicle development and use. This cuts down urban pollution and eventually improves public health. These would be initiatives focusing the country on sustainability in environments and economic resilience, aligning it in the map of a country driving the transition toward renewable resources.
- Skill Development and Education
Any economy requires skilled workers for growth, and the 2024 budget had sounded a wake-up call for skill development in high-demand sectors like technology, health, and manufacturing. The budget has also allocated some funds for the vocational training and skilling programs that aim at equipping India’s youth with high-quality skills required by the markets.
This skill-based approach becomes very important for India since the country is considered to be blessed with a demographic dividend because of having one of the youngest workforces globally. Through skill building, the nation will be able to support domestic industries as well as supply talent for the international markets. Higher education and better skill-building opportunities also become vital to improve unemployment, allowing individuals an avenue of upward economic mobility.
Challenges and Possible Roadblocks:
- Fiscal Deficit and Debt Management
Management of fiscal deficit will be a challenge for the government of the 2024 budget since the ambitious expenditure intentions, with massive provisions to the sectors of infrastructure, welfare, and defense will make an effective balance in their expenses and revenue streams crucial. Large borrowing would shoot the national debt up; such levels could hamper the country’s credit ratings, sending negative signals towards the country for foreign investments.
The government shall increase its tax collection efforts through more compliance and more taxpayers with increased tax revenues. The effectiveness of such a move is dependent on enforcement as well as transparency. There could be external shocks through rising interest rates across the world that would heighten debt servicing costs and warrant adjustments to fiscal policy.
- Control over Inflation
While the spending initiatives under the budget are supposed to boost growth, the increase in demand might be too rapid for the supply side, leading to inflation. Food and energy price inflation can reduce the purchasing power of households and raise the cost of living, thus burdening low-income families the most.
Monetary policy would be checked and readjusted by the government to keep the inflation within the acceptable levels. Controlling inflationary pressure without slowing down the economic growth demands that the supply chain remains productive, and production keeps pace with the demand.
- Implementation Challenges
Implementation difficulties will hinder the ambitious budget targets. For instance, projects related to infrastructure always delay because of bureaucratic red tape, land acquisition problems, and regulatory hurdles at the state level. It would require interdepartmental coordination and cooperation between the center and the states to ensure on-time and efficient implementation of budgetary measures.
Improving bureaucratic efficiency, reducing administrative delays, and encouraging private sector participation will enhance the effectiveness of the budget. Effective oversight mechanisms and transparent reporting practices will ensure that funds are utilized properly and projects are completed on schedule.
- Geopolitical and Trade Risks
Supply chains disruption, inflationary pressure, and geopolitical tensions across the world have increased risks manifold and the global economy is in a highly turbulent place. This can be as well detrimental to India for import-related raw materials disruptions along with higher production costs can hurt the exports of country. End.
Its growth trend would also be influenced by the trade policies of the nation with other prominent economies around the world. India will be able to diversify its trade and develop capabilities in its local manufacturing units to minimize imported goods when such risks surface.
Sectoral Analysis
- Agriculture
Agriculture still constitutes the crux of the Indian economy and employs half of India’s population. In the 2024 budget, agri-tech, irrigation projects and rural financing also witnessed an increase in the order to make Indian agriculture more modernized, productivity increased and less vulnerable to the vagaries of climate change.
But the issue is implementation in the distribution to the small-scale farmers. Enforce more of the policies as previous agricultural reforms that were not pushed through by involving the proper stakeholders, improving credit and technological supports to enable the farmers’ preparation and strengthen the sector.
- Manufacturing and Export
This will also motivate schemes like Make in India and the PLI. Such schemes would bring about reduction in import dependence, employment, and growth in exports. Some industries would surely gain from this sort of thing, such as electronics and pharmaceuticals.
However, pressure of competition and the scarcity of resources from worldwide can be potential hurdles toward the success of India. Still, quality, innovation, and sustainability are things expected from emerging markets such as India in a world competitive market where leaders, like China, exist. Its prospects to benefit by this move toward diversified supply chains from other countries rest upon its pace in generating infrastructures and attracting foreign investments into the country.
* Financial Market Implication:
The impact of the 2024 budget on financial markets will be tremendous, as it will be the first reaction both from local and foreigners. Infrastructural investments, digital economy initiatives, and green energy policies will attract inflows into real estate, technology, and renewable energy sectors. Government spending in infrastructure and the digital sector may have a positive impact on the stock market.
Growth potential will also attract foreign investors to India, especially if the reforms drive a business environment that is more conducive. Fiscal challenges and inflationary risks will, however temper investment enthusiasm. Finally, global market conditions and foreign interest rate policies will influence India’s financial markets and capital flows.
* Social and Economic Equity Considerations:
The focus of the 2024 budget is inclusive growth-a term used when looking for a reduction of inequality of income and raising people’s welfare. If appropriately put into action with these, then the true sense will be fulfilled with successful accomplishment.
Structural provisions for social discrimination in equity from the budget focus on women and the rural poor. Investments in health and education, along with skill development initiatives, will unlock upward mobility and reduce disparities. However, social equity also needs gender-sensitive policies to address low female workforce participation. To sustain equitable growth, a focus must also be placed on women’s entrepreneurship opportunities, improved access to education for girls, and enhanced maternal and child health care.
Conclusion:
The budget of 2024 of India marks an unparalleled step towards the economic growth of the year with a much higher interest in crossing the system barriers. Infrastructures base, innovation in digitals, the use of green energy sources, and the development of skill-sets for people will lay the strong foundation for the economy. This indeed depends a lot on the proper handling of funds and smooth execution of policy actions as well as proactiveness in terms of international changes controlling inflations and vulnerabilities.
Implementation of the 2024 budget can take India close to the $5 trillion economy goal through sustainable growth and upgrading the quality of life of its citizens. As the country moves further in this economic complexity, social equity, environmental sustainability, and financial stability would be important steps toward a more inclusive and prosperous future.
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