Overall, this is a positive budget for the markets, with continued focus on growth, prudence and transparency
FinTech BizNews Service
Mumbai, February 2, 2024: The prominent BFSI figures have welcomed the Union Budget 2024, presented by the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman in the Parliament in New Delhi. Ashishkumar Chauhan, MD and CEO, National Stock Exchange (NSE), has shared his interesting insights on the interim budget announced by the FM:
Focus On Growth, Welfarism And Fiscal Restraint
I give the Interim Budget 10/10. The budget focuses on growth, welfarism and fiscal restraint, while ensuring continuity on policies and taxation. The focus on capacity building through higher spending on hard as well as soft infrastructure and consequently facilitating job creation has continued. At the same time, the budget provides enough for poor, farmers, women, and youth, which in turn bodes well for the overall economic growth, thereby keeping us in a good stead in an otherwise uncertain world. At 5.8%, the revised fiscal deficit for FY23-24 is an improvement from the budget estimate by 10bps. Fiscal consolidation continues to be the front and centre, with the fiscal deficit for FY24-25 brought down to 5.1%, bettering expectations and a commitment of a sub-4.5% target by FY25-26.
The capex outlay has increased by 16.9% to a record high of Rs 11.11 lakh crore, implying 3.4% of GDP—the highest in 26 years, with strong focus on roads, transport, and railways. This implies a CAGR of 27% in the last five-year period. The quality of expenditure has also improved, with capital expenditure now comprising 23.3% of total expenditure—the highest in 30 years.
A social security framework is in place today for the poor and needy with coverage on power, health, housing, cooking gas and financial inclusion. Overall, this is a positive budget for the markets, with continued focus on growth, prudence and transparency.
(For readers’ context: What does the phrase ‘Perfect 10’ mean and from where does it come?: Romanian gymnast Nadia Comăneci made history at the 1976 Olympics by earning the first-ever perfect score of “10” for her performance in the uneven bars competition.)
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Government Has Signalled Need For Greater Private Sector Participation To Support Growth
Jagannarayan Padmanabhan, Senior Director & Global Head, Transport, Mobility and Logistics, Consulting, CRISIL Market Intelligence and Analytics: “After two years of high double-digit capex allocation for the infrastructure sector, the pause button seems to have been pressed. Nevertheless, roads and railways continue to garner a lion’s share of the proposed expenditure this year. The government has also indirectly signalled the need for greater private sector participation to support growth in these core sectors. That could mean asset monetisation could gather pace in the coming months.”
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Final Dividend Proceeds From Psus Are Likely To Be Significantly Higher
Ranen Banerjee, Partner and Leader Economic Advisory, PwC India: The divestment targets have been missed once again and FY25 budget estimates have also been kept at a conservative 50k crore only. The underachievement is understandable as there was no revenue pressure and with the shortfall too, the government has estimated to better the fiscal deficit at 5.8%. Given that the new government will present its full budget in July and the divestments take preparation time, the government has made conservative estimates. The government may not need more proceed from this line in next year too as the final dividend proceeds for FY25 from public sector enterprises are also likely to be significantly higher next year as those will be accounted for in FY25.
