For Federal Bank, which is deeply invested in India's growth, to see a responsible Budget that emerge in an election year gives tremendous confidence about India's economic outlook. We believe that the heart of this Budget is certainly its ability to desist from high deficits when growth is good.
In our view, the Budget that emphasise capex, connectivity, and innovation, will boost India's economic outlook the following ways:
Capex Spending: Fueling Broad-Based Economic Growth
The Interim Union Budget 2024-25 presented by Finance Minister on February 1, continues with a strong focus on powering growth for all through capital expenditure (capex) spending. In my mind, capex spending creates concentric circles of growth in downstream industries. From harnessing solar energy to connecting the nation, to promoting tourism, to boosting our medical ecosystem, to incentivising innovation, to prioritising technology, the multi pronged approach to capex is creating multiple nodes of progress that are sending out ripples of prosperity among India's households and businesses.
Sustainable Energy and Connectivity: Cornerstones of Future Prosperity
India's power demand is expected to grow by over 70% in the coming years. New solar power schemes and investments in wind will be core to how India powers her businesses and homes sustainably, in addition to removing barriers to entry for Indian products in international markets on the basis of their carbon footprints.
In the same vein, greater connectivity through Prime Minister Gati Shakti's Master Plan for Multi-modal Connectivity will power efficiencies (and savings!) across manufacturing, in addition to creating greater resilience in our supply chains.
Boosting Employment and Tourism through Infrastructure Investment
Investments in connectivity and green technology are already powering a new wave of job creation, bridging the economic gap between Bharat and India. The revamp of our rail bogies as per Vande Bharat standards, the UDAN scheme, and an increasing number of metro and Namo Bharat trains promise a closer coupling of our bustling metros and our heartlands.
It isn't much of a leap to imagine the massive boost that the tourism industry will receive from the influx of domestic and international tourists, who will now find India that much easier to traverse.
Initiatives like the Swachhta Rating Framework will also go a long way in removing other forms of friction that keep international travellers from exploring India's hidden gems.
This boost to tourism will, in turn, have a knock on effect on these places of public interest, spurring growth in local economies, and generating wealth and empowerment at a pin code level.
Empowering Technology and Innovation: Building a Digital India
India Stack and it's building blocks like Aadhaar, UPI, Co-Win, API Setu, DigiLocker, AarogyaSetu, GeM, UMANG, Diksha, E-Sanjeevani, E-Hospital, E-Office and many more are creating an ecosystem that empowers technology first companies, even when they are in traditional sectors.
These tailwinds will help India's startup ecosystem facilitate unicorns with increasing regularity, helping India cement her place as a global thought leader, and a hotbed of innovation.
Investing in India's Human Capital for a Brighter Future
Of course, none of this works without the right people with the right skills. The budget seeks to grow India's homegrown talent across the board, from agribusiness to an increase in the number of medical colleges is also a sound investment in India's future, and that of the world, as a consumer of the products and innovations we will create in the years to come.
In many ways, the Budget is an invitation for domestic and global companies to actively invest in India, access resources — natural, people and infrastructure — to benefit from its arbitrage, tap into the multiple segments of consumption, and give boost to their expansion plans for robust return on investments.
It is also an invitation for Indian businesses to rise to the challenge. We have great possibility and greater responsibility to anchor Vasudaiva Kutumbam in Amrit Kaal. After all, good economics stems from good governance.
—The author, MVS Murthy, is Chief Marketing Officer (CMO) at Federal Bank, one of India's leading private sector banks. The views expressed are personal.
(Edited by : C H Unnikrishnan)
First Published: Feb 7, 2024 10:06 AM IST
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