Opinion: Budget 2024 Presses All Right Buttons As FM Follows Marathon Discipline

Union Finance Minister Nirmala Sitharaman's seventh budget, the first under Modi 3.0, deserves praise for presenting a balanced approach that addressed a wide range of issues. Amid concerns over a shrinking demographic dividend window, she not only tackled the issue of employment but also announced steps to enhance India's youth employability. Expect expansion of job opportunities in the coming months when the budget measures kick in.

A particularly noteworthy scheme among those announced is the internship programme for 1 crore youth with top 500 companies. While the longstanding issue of insufficient job creation persists, the industry's concerns regarding employability gaps demanded urgent attention. The proposed internship scheme will provide India's youth with invaluable exposure to the core requirements of large corporations. The skills acquired while addressing real-time challenges faced by these corporations will be invaluable for job-seekers. It represents a significant step forward in addressing India's chronic issue of jobless growth.

Doing away with angel tax will encourage aspiring youth to become entrepreneurs. That, in turn, will create more job opportunities. The issue has been bothering India's startup ecosystem for a long time.

Steering Clear Of Populist Measures

Given the political backdrop of the budget, Sitharaman would have faced tremendous pressure to succumb to populism. Despite this, with the Lok Sabha elections over and Maharashtra, Haryana, and Jharkhand set for polls in a few months, she chose to focus on long-term goals. These include continuing fiscal consolidation, preparing India to become a developed country by 2047, introducing next-generation reforms such as digitising land records (potentially a significant measure against benami holdings and transactions), and fostering orderly financial markets focused more on productive asset creation and less on speculation. The list of such initiatives is quite long.

True to coalition principles, she announced a plethora of measures for Andhra Pradesh and Bihar, with a focus on asset creation rather than handouts. Initiatives such as allocation for Amravati, a project close to Telugu Desam Party (TDP) chief and Andhra Pradesh Chief Minister Chandrababu Naidu, and the development of a Buddhist corridor in Bihar's Gaya as a tourist hub, underscore efforts to develop regions and sectors capable of contributing more to India's development.

For market participants, the hike in long-term capital gains and security transaction taxes may be disappointing. However, given warnings about froth building up in the financial markets, these measures serve as a necessary disincentive to curb excessive speculative trading.

A Mindful, Comprehensive Budget

Perhaps the Finance Minister could have done more to boost consumption, which has been sluggish for some time. However, ongoing acceleration in economic growth and a series of measures aimed at job creation are expected to address these concerns over time.

Among the announced measures, the focus on revitalising big cities and reestablishing them as growth centres is noteworthy. Budgetary measures should also be complemented by effective governance of urban centres and attention to soft infrastructure requirements.

The budget is as much about continuity as it is about being mindful of the messages from the recently concluded Lok Sabha elections. In this sense, it also makes a strong political statement. The message emphasises transitioning to adapt to the challenges of coalition politics. The budget also nudges states to step up reforms and build capacities.

The budget also gives a push to Prime Minister Narendra Modi's vision of clean energy. A renewed focus on nuclear energy is a welcome change. The budget also promises a policy document on energy transition with a view to fostering environmental sustainability.