Deconstructing budget 2024: why the government is focusing on fiscal prudence in an election year.

Deconstructing budget 2024: why the government is focusing on fiscal prudence in an election year.


India’s Finance Minister Nirmala Sitharaman (centre) outside the finance ministry office before leaving to present the budget at the Indian Parliament on February 1, 2024.

Synopsis

According to economists and market experts, the path of fiscal consolidation will attract more foreign investors to India. A low interest-rate environment coupled with higher capex in the private sector is expected to help the economy cruise towards the USD5-trillion mark by FY28.

It’s always tempting to splurge in an election year. But on Thursday, finance minister Nirmala Sitharaman chose to take the unpopular path by playing the perfect fiscal hawk. Rolling out an aggressive fiscal consolidation plan in her 58-minute budget speech, devoid of any major announcements, Sitharaman said the government will borrow less money from the market in FY25, which will “facilitate larger availability of credit for the private

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Author: Shirley