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In the Union Budget 2024, Union Finance Minister Nirmala Sitharaman has given preference to financial prudence rather than indulging in populist measures. It is a budget with a distinct vision and has the potential to further the country’s economic progress without the glittering fireworks necessary to make it a populist one. Starting from bringing down the fiscal deficit target to employment generation, skill development, and rural development, the budget has proposed some important steps to help the country’s economic prosperity. The Union Finance Minister has utilised the INR 2.1 trillion RBI payout to lower the fiscal deficit target to 4.9 per cent in the 2024-25 financial year from the proposed 5.1 per cent in the interim budget presented last February by opting against the distribution of freebies to the people. Similarly, Sitharaman has earmarked INR 2 trillion over the next five years for employment and skill training for nearly 4.1 crore youths of the country. Moreover, the budget has proposed helping 20 lakh youths annually to enhance their skills in collaboration with state governments. As per the budget, a new assessment model to judge the creditworthiness of the MSME sector was proposed to help the growth of the manufacturing sector.
The budget has also made substantial allocations to the North-eastern region. An allocation of INR 1.11 lakh crore for capital expenditure and flood management assistance to Assam was announced. The region will further benefit from the tribal development fund and renewed stress on tourism. Henceforth, the Centre, along with the various state governments of the region, should draw a comprehensive plan to bring sustainable and substantial development to the region. The budget proposals will please entrepreneurs in the region as the proposed financial incentives will make them more competitive, which in turn will push forth growth. However, other than Assam and Sikkim, states like Manipur, Arunachal, and Nagaland have reason to be disappointed, as financial assistance to these states has gone missing from the list of places frequented by floods and landslides.
However, the budget was lacking in several other areas which deserved more generous funding. One such sector is climate change, where the budget allocation appears to be insufficient, considering the magnitude of the crisis. It may be argued that allocation in green energy also contributes to combating the problem. But the need of the hour is to ensure sustainability, which cannot be achieved by only spending big on green energy; a multifaceted approach is needed. Similarly, there is no significant proposal in this year’s budget to rescue the agriculture sector from the ongoing crisis. This year’s allocation for the agriculture and allied sector is INR 1.51 lakh crore, which is at par with 2019 levels. Overall, the budget for the 2024-25 fiscal year should be lauded for its structural approach to strengthening the country’s economy and rejecting populism.