The FY25 Union Budget has sent out a strong message under the new administration — there remains an unequivocal focus on stability (fiscal) and continuity (of sustainable growth impulses) amidst a new chiselled focus on providing growth a more inclusive character in India. Focus on ‘weaker building blocks’ The 8.2% GDP growth in FY24, while commendable, was driven by an uneven K-shaped segmentation.
The premiumisation of consumption, as seen in the robust demand for luxury cars, houses and goods, coincided with stagnant wages, low fast-moving consumer goods sales and (food) inflation continuing to vociferously bite those at the bottom end of the income pyramid. The fiscal deficit, at 5.6% of GDP in FY24, still high compared to pre-COVID-19 pandemic levels, provided the needed growth impetus via capital spending at a time when the private capex cycle remained much on the sidelines.
Against this background, the FY25 Budget, through a panoply of measures, has addressed the weaker building blocks, viz. to improve the quality of employment, fortify agriculture and bring in the micro, small and medium enterprises (MSMEs) into a meaningful roleplay in India’s manufacturing renaissance. This will pave the path to establish a Viksit Bharat by 2047.
From an agriculture perspective — currently a key priority — promotion of Atmanirbharta in pulses and oilseeds, a focus on agriculture research (bearing in mind the realities of climate change), large-scale clusters for vegetabl.