Indian Economy Booms, Aims for Third Largest in the World

Economic Transformation and Growth: Finance Minister presents Interim Budget for 2024-25
Finance Minister Nirmala Sitharaman
Finance Minister Nirmala Sitharaman

New Delhi |The Indian economy has witnessed a profound positive transformation in the last 10 years, Finance Minister Nirmala Sitharaman said on Thursday.

Sitharaman in her pre-election Budget, which is technically a vote on account and popularly termed an interim Budget, said people of India are looking ahead to the future with hope and options.

She further said the government under the leadership of Prime Minister Narendra Modi covered all aspects of inclusivity.

Structural reforms, pro-people programmes and employment opportunities helped the economy get new vigour, the finance minister said.

After contracting by 5.8 per cent in 2020-21, the economy recorded a growth of 9.1 per cent in 2021-22.

The finance ministry in its latest monthly economic review said the Indian economy will become third largest in the world in the next three years with a GDP of USD 5 trillion from the current USD 3.7 trillion.

It also said India can aspire to become a USD 7 trillion economy in the next six to seven years (by 2030).

In December, the Reserve Bank of India raised the GDP growth projection for the current fiscal to 7 per cent from 6.5 per cent earlier on buoyant domestic demand and higher capacity utilisation in the manufacturing sector.

The Washington-headquartered International Monetary Fund (IMF) has projected that economic growth in India to remain strong at 6.5 per cent in 2023-24 and 2024-25, an upgrade of 0.2 percentage points for both years from earlier forecast.

The World Bank has projected a growth rate for India at 6.4 per cent for the current financial year, and a marginally higher expansion in the GDP at 6.5 per cent for 2024-25.

Another leading multilateral agency ADB has raised the growth outlook for India to 6.7 per cent for 2023-24 from 6.3 per cent, following faster-than-expected expansion in July-September, driven by double-digit growth in industry

The country's capital spending for 2024-25 has been raised 11 per cent to Rs 11.11 lakh crore, or 3.4 per cent of GDP, Finance Minister Nirmala Sitharaman said on Thursday.

She said the tripling of capex in the last four years has resulted in a multiplier effect on economic growth and employment generation.

The minister said the Indian air carriers have placed orders for 1,000 new aircrafts.The government on Thursday announced the extension of healthcare cover under Ayushman Bharat to all ASHA and anganwadi workers.

Ayushman Bharat Pradhan Mantri-Jan Arogya Yojana (AB-PMJAY) is the largest publicly funded health insurance scheme in the world that provides coverage of Rs 5 lakh per family per year for secondary and tertiary care hospitalisation.

Till December 27 last year, 55 crore people belonging to 12 crore families were covered under the scheme.

While presenting the interim Budget, Finance Minister Nirmala Sitharaman said it is the government's priority to adequately and timely finance MSMEs.

The government will launch a housing scheme for deserving middle class to buy or build their own houses, Finance Minister Nirmala Sitharaman said on Thursday.

Sitharaman, in her pre-election Budget, which is technically a vote on account and popularly termed an interim Budget, said the government will also adopt an economic approach that facilitates sustainable development and improves productivity.

She also mentioned about rooftop solarisation to ensure one crore household free electricity of up to 300 units per month, leading to household savings of Rs 15,000-18,000 annually.

The finance minister said the government will set up more medical colleges, utilising existing hospital infrastructure.

Besides, utmost attention will be paid to the development of the eastern region and its people

The country is close to achieving the target of 3 crore houses under the rural housing scheme and two crore more will be constructed in the next five years, Finance Minister Nirmala Sitharaman said on Thursday.

Earlier this month, Prime Minister Narendra Modi released the first instalment of Rs 540 crore to one lakh beneficiaries of a rural housing scheme under the Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan (PM-JANMAN) via video conferencing.

She said to meet investment needs, the government will prepare the financial sector in terms of size, capacity, skills, and regulatory framework.

The government will facilitate high and more resource-efficient economic growth to ensure energy security for the country.

She added that India as a G20 host has showed the way forward and built a consensus for solutions for problems being faced by the world.

India organised the G20 summit here at Bharat Mandapam last year.

The government will take up next-generation reforms to facilitate growth and the next five years will be of unprecedented development and golden moments to realise the dream of developed India by 2047, Finance Minister Nirmala Sitharaman said on Thursday.

She outlined the strategy for 'Amrit Kaal' while presenting the interim Budget 2024-25.

The finance minister also said the recently announced India Middle East Europe Economic Corridor will be a game changer for India.

She noted that the International Financial Services Centres Authority (IFSCA) has created a robust gateway for flow of overseas capital.

Proactive inflation management has helped keep the country's inflation within the manageable range, Finance Minister Nirmala Sitharaman said while presenting the interim Budget on Thursday.

She also said that the inflation has moderated.

The Reserve Bank of India has been mandated by the government to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.

Retail inflation rose at the fastest pace in four months in December 2023 at 5.69 per cent on account of an increase in prices of vegetables, pulses, and spices.

The annual inflation based on the Consumer Price Index (CPI) was at 5.55 per cent in November and 5.72 per cent in the year-ago month.

As per the data released by the National Statistical Office (NSO), the rate of price rise in the food basket, which constitutes nearly half of the CPI, increased to 9.53 per cent in December 2023 against 8.7 per cent in the preceding month and 4.19 per cent in December 2022.

In August 2023, inflation had touched a high of 6.83 per cent

Finance Minister Nirmala Sitharaman on Thursday said as many as 11.8 crore farmers were provided financial assistance under the PM KISAN Yojana.

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is one of the world's largest Direct Benefit Transfer (DBT) schemes.

Under the PM-KISAN scheme, the government provides a financial benefit of Rs 6,000 per year in three equal four-monthly instalments. The money is transferred into the bank accounts of farmers' families across the country through DBT mode.

Announced in February 2019 in the interim budget, the scheme was effective from December 2018

Finance Minister Nirmala Sitharaman on Thursday said worries about food have been eliminated through free rations for 80 crore people in the country.

While presenting the interim Budget in the Lok Sabha, she said India was facing enormous challenges when the Modi government took office in 2014 and overcame those in the right earnest.

In November last year, Prime Minister Narendra Modi said his government would extend the free ration scheme for the impoverished population for a five-year period.

Finance Minister Nirmala Sitharaman on Thursday said 25 crore people got freedom from multi-dimensional poverty in the last 10 years.

Earlier approach of tackling poverty through entitlement resulted in very modest outcomes, she said while presenting the interim Budget in the Lok Sabha.

There is transparency and assurance that benefits are transferred to all eligible citizens, Sitharaman said.

The National Education Policy is ushering transformational reforms, she added.

Govt to expand electric vehicle ecosystem to support charging infra: The government will expand the electric vehicle ecosystem to support charging infra, and e-buses for public transport networks will be encouraged, Finance Minister Nirmala Sitharaman said on Thursday.

Sitharaman, in her pre-election Budget, which is technically a vote on account and popularly termed an interim Budget, also said the blending of compressed biogas into compressed natural gas for transport and piped natural gas will be mandatory.

Biomanufacturing and bio foundry scheme will be launched to provide environment-friendly alternatives for bio-degradable production, she added.

Sitharaman said India's economic strength has made the country an attractive destination for business and conference tourism.

She said tourism has tremendous opportunities and promised that the government will take up the development of iconic tourist centres to attract foreign tourists

Coal gasification, liquefaction of 100 metric tonne to be set up by 2030: Coal gasification and liquefaction of 100 metric tonne will be set up by 2030, Finance Minister Nirmala Sitharaman said on Thursday.

In January, the government approved an outlay of Rs 8,500 crore as financial assistance for promoting coal, lignite gasification projects.

The government has also approved setting up of a coal-to-SNG (Synthetic Natural Gas) project through a joint venture between Coal India and GAIL at an investment of Rs 13,052.81 crore and coal-to-ammonium nitrate project through a joint venture between CIL and BHEL for Rs 11,782.05 crore.

The decision is a significant step as it helps reduce import of chemicals, which can be derived through coal gasification.

She said India has received Foreign Direct Investment (FDI) inflow of USD 596 billion since 2014, which is double the inflow between 2004 and 2014.

She added that the government has launched Blue Economy 2.0 to promote aquaculture in the country.

No changes in tax rates for direct, indirect taxes : Finance Minister Nirmala Sitharaman on Thursday said there are no changes in tax rates for direct and indirect taxes, including import duties.

She also said the number of tax filers has swollen 2.4 times and the direct tax collection has trebled since 2014.

The processing time of tax returns has been reduced from 93 days in FY14 to 10 days; and refunds have been made faster, she said.

The government continues to be on the path of fiscal consolidation to reduce fiscal deficit to 4.5 pc in 2025-26.

She added that the tax base of Goods and Services Tax (GST) has more than doubled since FY14

Fiscal deficit for FY25 pegged at 5.1 pc of GDP against 5.8 pc in current fiscal: The fiscal deficit for 2024-25 is estimated at 5.1 per cent of GDP against 5.8 per cent in the current financial year, Finance Minister Nirmala Sitharaman said on Thursday.

Presenting the interim Budget 2024-25, Sitharaman said tax receipts for 2024-25 projected is projected at Rs 26.02 lakh crore.

She informed that the fiscal deficit in FY24 is expected at 5.8 per cent of GDP, down from 5.9 per cent estimated earlier.

The Union government's fiscal deficit touched Rs 9.82 lakh crore or 55 per cent of the annual Budget target at December-end 2023. In the corresponding period last year, the deficit was 59.8 per cent of the budget estimates for 2022-23.

Sitharaman also said 50-year interest-free loans of Rs 75,000 crore to be extended to states to realise the dream of a developed India, and added that every challenge of pre-2014 was overcome through our economic management.

Welfare of poor, women, youth, farmers govt's highest priority: Meeting the needs and fulfilling the aspirations of four "major castes" -- the poor, women, the youth and farmers -- of the country are the government's highest priority, Finance Minister Nirmala Sitharaman asserted on Thursday.

Presenting the interim budget for 2024-25, she said the government is working with an approach to ensure development that is all-round, all-pervasive and all-inclusive.

"It covers all castes and people at all levels. We are working to make India 'Viksit Bharat' by 2047. For achieving this goal, we need to improve people's capability and empower them," she said.

There is a need to focus on "four major castes" that are "garib" (the poor), "mahilayen" (women), "yuva" (the youth) and "annadata" (the farmer), Sitharaman said and asserted that their needs, aspirations and welfare are "our highest priority".

"The country progresses, when they progress. All four require and receive the government's support in their quest for better their lives. Their empowerment and wellbeing will drive the country forward," the finance minister said in her pre-election budget.

She said that earlier, social justice was mostly a "political slogan". For this government, social justice is an effective and necessary governance model, Sitharaman said.

"The saturation approach of covering all eligible people is the true and comprehensive achievement of social justice. This is secularism in action, reduces corruption and prevents nepotism. There is transparency and assurance that benefits are delivered to all eligible people," she said.

Sitharaman said that now resources are distributed fairly.

"All, regardless of their social standing, get access to opportunities. We are addressing systemic inequalities that had plagued our society. We focus on outcomes and not on outlays so that the socio-economic transformation is achieved," she said.

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