As the nation eagerly awaits the unveiling of the Interim Budget for the financial year 2024-25 on February 1st, speculations and expectations are rife, particularly in this election year. The government’s economic policies have been a focal point, with a distinct emphasis on investment-led growth. Let’s delve into the expectations and projections for Budget 2024 and explore which sectors are anticipated to thrive.
Diversification in Infrastructure Spending:
Expectations are high for the government to diversify its infrastructure spending, extending beyond traditional sectors like roads and railways. Ports, shipping, sustainable energy, and urban development are poised to benefit from this strategy. The government’s commitment to transitioning from carbon-dependent to energy-efficient policies aligns with global sustainability trends.
Private Sector Investment Boost:
To supplement public sector investment, Budget 2024 is expected to introduce measures to encourage higher private sector investment. Incentives and initiatives to attract private investors may play a pivotal role in sectors where private investment has been relatively modest.
Export Growth Revitalization:
Addressing recent contractions in export growth is a key priority, and the government is anticipated to focus on boosting exports by exploring new markets and supporting growth in existing ones. This becomes crucial for economic recovery, especially given the prevailing global uncertainties.
Subsidy Rationalization and Rural Development:
While expectations are for continued subsidy rationalization to reduce the fiscal deficit, challenges such as the impact on rural demand are acknowledged. The recommendation is to redirect subsidy savings toward initiatives supporting sustainable growth in rural income, possibly through increased spending on rural infrastructure.
Government Borrowing and Fiscal Deficit:
Projections suggest that the government will target a fiscal deficit of 5.2% – 5.4% for FY25. The expected borrowing program aims to balance the need for funds with the objective of not crowding out the private sector, especially during the second half of the financial year.
The Metals Sector Shines:
The hallmark of the government’s economic program has been its focus on investment-led growth, particularly in infrastructure projects. While there might be a pause in the current Budget, signs of a revival in government and private capex spending are evident.
Cement Sector In Focus:
Anticipated measures encouraging higher private-sector investment could significantly impact the cement industry. Incentives and initiatives aimed at attracting private investors may translate into increased projects and, subsequently, higher cement consumption in sectors where private investment has historically been limited.
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