Budget 2024: Modi 3.0 government to focus on job creation and private investment growth.
Union Budget 2024: The Narendra Modi-led NDA government is set to prioritize India's economic growth momentum while implementing targeted policies to generate employment opportunities and bolster private investment, according to individuals familiar with early discussions on reforms.
According to an ET report by Deepshikha Sikarwar, the Modi government's long-term strategy will incorporate elements from the five-year plans and the vision document aimed at transforming India into a developed nation by 2047, while the immediate plan will build upon the agenda prepared for the first 100 days before the elections.
The Union Budget 2024, expected to be unveiled in early July, will outline specific measures to achieve these objectives.
"The focus would be to promote labour-intensive growth that will create jobs, with continued emphasis on macroeconomic stability," a top government official aware of the details told the financial daily.
The government is considering various initiatives related to startups and taxation, including the correction of inverted duty structures and the rationalization of GST rates.
The expansion of production-linked incentive (PLI) schemes to encompass more sectors that generate substantial employment, such as the leather industry, is under consideration. Another individual privy to the discussions said that the government's ongoing support for capital expenditure will continue to encourage private investment.
The newly elected government is likely to maintain its focus on emerging sectors like green energy, mobility, and technology, which have the potential to generate employment opportunities for the country's youth. Job creation was a significant issue during the recent elections.
Following the targeted recruitment drive to hire 1 million individuals in FY24, the government is expected to reveal plans to expedite the filling of vacant positions within its ranks.
India's economy expanded by 8.2% in FY24, supported by a 7.8% growth in the March quarter, as per recently released official data.
A third official said that the government would also prioritize strengthening the domestic economy to mitigate risks posed by geopolitical factors.
Aditi Raman, an associate economist at Moody's Analytics, was quoted as saying "The Union budget, due in the September quarter, will be an early indicator of policy priorities, including short- and long-term responses to some of those key economic challenges."
Due to time constraints, the new government may refrain from introducing substantial tax reforms, reserving them for the next budget in February 2025. However, various adjustments are being considered to create a more taxpayer-friendly regime.
Over the past two months, the finance ministry has conducted extensive stakeholder consultations to enhance the ease of doing business. "Internal discussions have been undertaken to identify thrust areas for both the short- and long-term," said one of the officials, adding that some manifesto promises, such as the expansion of Ayushman Bharat, could be announced immediately.
