The Union Finance Minister, Nirmala Sitharaman, presented the Interim Budget for the fiscal year 2024-25 on Thursday, marking the last budget of the Modi 2.0 government as the Lok Sabha elections are likely to take place in May. Despite the approaching elections, the Finance Minister resisted the temptation to announce significant spending on schemes for the poor and instead concentrated on fiscal consolidation to attract investors, indicating the BJP’s confidence in securing a rare third term.
Notably, Mahindra Group Chairman Anand Mahindra commended FM Sitharaman for keeping the budget short and crisp. He expressed that the Budget should not necessarily be the occasion for transformational policy announcements but an opportunity to plan finances prudently and with fiscal rectitude.
Mahindra outlined five reasons why he was pleased with Sitharaman’s Interim Budget speech. First and foremost, he hailed the Finance Minister for delivering her shortest speech, emphasizing the brevity that communicates quiet confidence.
Secondly, Mahindra appreciated that the Interim Budget included no populist measures. He expressed hope that avoiding such measures becomes a permanent norm in future budget speeches, promoting financial prudence.
Thirdly, he commended the government for achieving a better fiscal deficit target than envisaged. The fiscal deficit target for 2024-25 is set at 5.1% of GDP, down from 5.8% in the current financial year.
Given that the FM announced no changes in tax rates for direct and indirect taxes, Mahindra lauded the decision, stating that businesses value stability and predictability, qualities evident in this budget.
The biggest announcement, according to Mahindra, was the higher Tax to GDP ratio. He emphasized that this development cements a strong foundation for fiscal flexibility and aggressive expenditure when needed. He urged FM Sitharaman to trumpet this achievement more loudly.
The Interim Budget for 2024 increased by 6.1% to ₹47.66 lakh crore due to a rise in expenditure and higher allocation for capital expenditure and social sector schemes. FM Sitharaman highlighted that revenue receipts at ₹30.03 lakh crore are expected to be higher than the Budget Estimate, reflecting strong growth momentum and formalization in the economy.
The nominal GDP growth for the next financial year has been pegged at 10.5%, slightly lower than the earlier estimate of 11%. Sitharaman stressed that the impact of all-round development is discernible in all sectors, with macro-economic stability, robust investments, and an overall flourishing economy.
Anand Mahindra’s positive response to the Interim Budget underscores the importance of fiscal responsibility, stability, and confidence-building measures, especially as India navigates economic challenges and prepares for the upcoming elections.
