Growth sequel starring jobs, investment, CFO News, ETCFO

The Narendra Modi-led NDA government will look to build on India’s growth momentum while making specific policy interventions to create jobs and strengthen private investment, among other measures, said people with knowledge of early deliberations on reforms.

The final plan will lean on the agenda for the first 100 days, prepared before the elections. The longer-term plan will draw from five-year plans and the vision document for making India a developed nation by 2047.

The full budget, likely to be presented early in July, will detail specific measures toward this end. “The focus would be to promote labour-intensive growth that will create jobs, with continued emphasis on macroeconomic stability,” a top government official aware of the details told ET. A host of measures on startups and taxation – including inverted duty structure correction, along with GST rate rationalisation – is under discussion, said the person cited above.

Capex Support
Expansion of production-linked incentive (PLI) schemes – to include more sectors that are large job creators, such as leather – is being considered.

Another person aware of the deliberations said the Centre’s capital expenditure push will continue to support private investment.

The BJP-led NDA won 293 seats in the 543-seat lower house of Parliament. BJP secured 240 seats on its own, falling short of the majority 272 mark. This has given rise to speculation that contentious reforms may not be pursued and some changes in the details may be made, taking into consideration the views of allies.

The government is expected to continue to emphasise new-age sectors such as green energy, mobility and technology that could create employment for the youth. Lack of jobs emerged as a key concern during the elections.

The new government is also expected to announce plans to quickly fill up government vacancies on the lines of the focused recruitment initiative to employ 1 million people launched in FY24.

Besides, a major initiative on the ease of doing business in areas that touch the aam aadmi could be on the anvil, said the second person cited.

India’s GDP grew 8.2% in FY24, backed by a 7.8% expansion in the March quarter, as per official data released last month.

“The interim budget had provided a blueprint… (they) would.. continue with the building blocks with focus on macroeconomic stability,” the first official said.

A third official said the government’s emphasis would also be on strengthening the domestic economy in the wake of the risks posed by geopolitical factors.

“The Union budget, due in the September quarter, will be an early indicator of policy priorities, including short- and long-term responses to some of those key economic challenges,” said Aditi Raman, associate economist at Moody’s Analytics.

Taxes, Ease of Business
The new government may not unveil big-ticket tax changes, leaving them for the next budget – in February 2025 – because of the paucity of time. However, many tweaks are being considered to make the taxpayer regime more friendly.

The finance ministry has, over the past two months, held extensive stakeholder consultations on improving ease of doing business. “Internal discussions have been undertaken to identify thrust areas for both the short- and long-term,” said one of the officials cited, adding that some manifesto promises such as expansion of Ayushman Bharat could be announced immediately.

  • Published On Jun 10, 2024 at 09:29 AM IST

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis.

Download ETCFO App

  • Get Realtime updates
  • Save your favourite articles

Scan to download App

Leave a Comment