While delivering the Budget speech on Thursday, Finance Minister Nirmala Sitharaman said that proactive inflation management has helped keep the country’s inflation within the manageable range. The finance minister also promised economic reforms to drive growth. India’s economy, the fastest growing among major nations, is going through profound change, Sitharaman said to the thumping of desks in parliament.
The interim budget is being seen as an economic manifesto for Prime Minister Narendra Modi’s ruling party and will give clues to the market on its plans for fiscal consolidation, borrowings and future taxation policy. “The next five years will be years of unprecedented development and golden moments to realize the dream of developed India by 2047,” Sitharaman said. She said the next generation of reforms will be carried out in consultation with state governments. The government has simplified India’s complicated tax structures, invested in new ports and roads but has struggled to liberalise land acquisition and labour laws.
Sitharaman did not spell out the proposed reforms. While India’s economic growth is expected to notch a 7.3 per cent pace for the financial year ending March 31, 2024, consumption has remained weak with growth at just over 4 per cent.
Furthermore, she stated that the Foreign Direct Investment (FDI) for the financial year 2014-2023 amounted to $596 billion. The finance minister said that while global affairs are becoming more complex, globalization is being redefined with reshoring, disruption and fragmentation of supply chains and competition for critical minerals and technologies. “A new world order is emerging. India assumed the G20 Presidency during very difficult times. The global economy was going through high inflation, low growth, high interest rates, very high public debt, low trade growth and climate changes. The COVID-19 pandemic has led to a crisis of food, fertilizer, fuel and finances while India successfully navigated its way and showed the world the way forward. India built consensus on global problems, and the recently announced India Middle East Europe Economic Corridor is a strategic and economic game changer for India and others,” she said.
Talking about the trade corridor, Moin Ladha, Partner, Khaitan & Co, said, “India’s entry into the Kartavya Kal has been announced with the India Middle East-Europe trade corridor which supports India’s unfettered commitment to national development and ambitious vision to transform into a developed nation by the centenary of its independence in 2047. This corridor is expected to positively impact and facilitate world trade and India’s trade in the GCC region.”
On the tax collection, the finance minister said that over the last 10 years, tax collections have more than doubled. She mentioned that the estimated tax receipts for the financial year 2024-25 are Rs 26.02 lakh crore. Additionally, the finance minister highlighted that the average processing time for tax returns decreased to 10 days this year.