AUTHOR’S NAME – Sashwat Shahi, BBA (Compl.).
INSTITUTION NAME – City college of management, Faizabad Road, Lucknow, Uttar Pradesh.
INTRODUCTION:
The Indian Budget 2024, with a total allocation of ₹45 lakh crore, has been met with mixed reactions, and rightly so. While there are some praiseworthy aspects, several critical areas have been overlooked or inadequately addressed. This budget, presented by Finance Minister Nirmala Sitharaman, seems like a missed opportunity, despite its good intentions. Let’s look into the pros and cons of this budget.[i]
- Infrastructure Push: At What Cost?
The budget’s emphasis on infrastructure development is laudable, with a significant allocation of ₹10 lakh crore dedicated to this sector. The increased allocation to the National Infrastructure Pipeline (NIP) is a step in the right direction, promising to boost connectivity, create jobs, and accelerate economic growth.[ii] However, the question remains: at what cost? The heavy spending on infrastructure, while necessary, could increase the fiscal deficit, which is already a cause for concern. With global economic uncertainties and rising interest rates, this aggressive spending could strain the government’s finances, potentially leading to cuts in other critical areas or increased borrowing.
- Digital Economy: A Visionary Move, But What About Execution:
The focus on digital transformation and innovation is another highlight of the budget, with ₹1.5 lakh crore allocated to expanding broadband connectivity, promoting start-ups, and establishing Digital Villages.[iii] These forward-thinking initiatives could drive India’s economic future. Nonetheless, the success of these initiatives relies on their execution. Experience has shown that government-led digital projects often face significant implementation challenges, ranging from bureaucratic delays to technological problems. Without a strong execution plan, these visionary initiatives might remain on paper, failing to deliver the promised benefits.
- Healthcare and Education:
Healthcare and education are rightly prioritized in the budget, with ₹2.3 lakh crore allocated to healthcare and ₹1.8 lakh crore to education to strengthen infrastructure and improve quality.[iv] These sectors are critical to India’s long-term growth and development. Despite the increased funding, the budget falls short of introducing bold reforms that could have truly transformed these sectors. The healthcare system still struggles with accessibility and quality, particularly in rural areas. While more funds are always welcome in education, the budget lacks innovative approaches to tackle deep-rooted issues like rote learning, inadequate teacher training, and less access to quality education.[v]
- Agriculture: More of the Same, But Little Innovation:
The budget includes measures to support the agricultural sector, with ₹1.2 lakh crore allocated, including higher allocations for the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme and initiatives for sustainable farming practices. While these measures are beneficial, they largely continue existing schemes without introducing innovative solutions to the systemic issues affecting Indian agriculture.[vi] Farmers still face challenges like poor market access, inadequate pricing mechanisms, and vulnerability to climate change. The budget could have been an opportunity to introduce transformative reforms in agri-tech, crop insurance, and value-chain integration, but it stopped short of doing so.
- Tax Reforms: Relief for the Upper Class, But What About the Middle Class?
The revision of personal income tax slabs and the reduction of corporate tax rates for MSMEs are positive steps, with ₹80,000 crore allocated to these measures, offering some relief to taxpayers and small businesses. However, the budget’s tax reforms are limited in scope and do not address the broader issues within India’s tax system.[vii] The lack of significant reforms in GST and the failure to broaden the tax base are glaring omissions. Additionally, the middle class, which has been hit hard by inflation and rising living costs, might feel that the relief offered is too little to make a substantial difference in their financial lives, making it the most highlighted issue in this whole fiscal blueprint.
- Sustainability: Determined Goals, But No Roadmap
The budget’s commitment to sustainability and green initiatives is evident with ₹1 lakh crore allocated to programs such as the National Green Hydrogen Mission and investments in renewable energy. However, these ambitions are not matched by a clear and detailed roadmap. The government’s targets for achieving net-zero emissions by 2070 are ambitious, but the budget does not provide a concrete plan for how these goals will be achieved.[viii] Without clear guidelines, timelines, and accountability measures, these initiatives risk becoming more oratory than reality.
- Social Welfare
The increased allocation for social welfare programs, with ₹3 lakh crore dedicated to these efforts, is a positive aspect of the budget, reflecting the government’s intention to support vulnerable sections of society. However, the challenge lies in ensuring that these funds are effectively utilized and reach those who need them most.[ix] Past experiences with social welfare schemes have shown that issues like corruption, bureaucratic inefficiencies, and lack of awareness often question the effectiveness of these programs. The budget lacks innovative approaches to overcome these challenges and ensure that the benefits of social welfare schemes are fully realized.
CONCLUSION:
The Indian Budget 2024, while well-intentioned, leaves much to be desired. It addresses some critical areas but fails to introduce bold, transformative reforms that could have set India on a faster, more equitable growth trajectory. The heavy spending on infrastructure and digital innovation is laudable, but without a clear execution strategy, these initiatives risk falling short of their potential. Moreover, the budget’s approach to healthcare, education, agriculture, and tax reforms reflects more continuity than change, missing the opportunity to hit deeper, more impactful reforms. In conclusion, the budget is a mix of good intentions overshadowed by missed opportunities. It sets a positive direction but lacks the depth and boldness required to tackle India’s pressing challenges effectively. As we move forward, the focus must shift from merely announcing schemes to ensuring their successful implementation and addressing the underlying structural issues that continue to hold back India’s full potential.
[i] deccanherald, https://www.deccanherald.com/business/union-budget/union-budget-2024-what-the-budget-has-for-common-man-3118270, (last visited Aug. 6, 2024).
[ii] pib.gov, https://pib.gov.in/PressReleasePage.aspx?PRID=2036078, (last visited Aug. 6, 2024).
[iii] cnbctv18, https://www.cnbctv18.com/economy/budget-2024-pm-kisan-allocation-rs-60000-crore-unchanged-19446347.htm, (last visited Aug. 6, 2024).
[iv] Thehindu, https://www.thehindu.com/news/national/budget-allocation-up-states-urged-to-spend-more-on-improving-health-infrastructure/article68488499.ece, (last visited Aug. 6, 2024).
[v] Hanson, Kara, et al. “The Lancet Global Health Commission on financing primary health care: putting people at the center.” The Lancet. Global health vol. 10,5 (2022): e715-e772. doi:10.1016/S2214-109X(22)00005-5
[vi]pib.gov, https://pib.gov.in/PressReleasePage.aspx?PRID=2035586#:~:text=The%20Budget%202024%2D25%20has,for%20agriculture%20and%20allied%20sector, (last visited Aug. 6, 2024).
[vii] business-standard, https://www.business-standard.com/finance/personal-finance/budget-2024-new-income-tax-slabs-announced-middle-class-gets-no-relief-124072300581_1.html, (last visited Aug. 6, 2024).
[viii] mnre.gov, https://mnre.gov.in/national-green-hydrogen-mission/, (last visited Aug. 6, 2024).
[ix] orfonline, https://www.orfonline.org/expert-speak/budget-cuts-the-ripple-effect-on-social-welfare-schemes, (last visited Aug. 6, 2024).