Union Budget 2024-25: Three D’s of Development

The Union Budget of India has presented a unique 3D combination of forces to achieve the goal of a developed India – Demography, Democracy, and Diversity. These three words are having their own dictionary meanings which can be interpreted differently in relation to any sovereign nation. But there is an effort to find a unique combination of the three forces to foster development in India by establishing a sort of synergy in the positive attributes of the three of them.

Democracy is defined as the belief in freedom and equality between people, or a system of government in which power is held by elected representatives. Democracy gives every citizen a right to pursue any occupation of his or her choice and a right to participate in economic activities. The governments have to work towards making available enough opportunities to the people so that they can choose the one that suits their skills or like.

Demography is defined as the number and characteristics of the people who live in an area, in relation to their age and gender etc. Diversity is the condition of having or being composed of differing elements. In our context we talk about diversity in terms of people of different races, faiths, cultures, etc. in a group.

So, when these forces are combined equitably, they translate into sabka saath, sabka vikas and sabka vishvas, as quoted by the Finance Minister which in my opinion implies that everyone participates, everyone prospers and everyone has faith in the political system that is committed to give them fair and equal chance to grow and get his or her bit of share in the fruits of the collective pursuit towards growth. There is no arithmetic equation with which we can explain this trinity yet they are interictally woven elements that reinforce each other, if pursued in a strategic and tactical manner.

People-Centric Inclusive Development Strategy

The main thrust of this strategy is given in the Union Budget as under:

1. Substantive development of physical, digital, and social infrastructure
2. Promotion of formalization and financial inclusion through Digital Public Infrastructure (DPI)
3. Strengthening of the financial sector through improvement in savings, credit and Investment
4. Establishing GIFT IFSC- A robust gateway for global capital and financial services for the economy
5. Proactive Inflation management
6. Active participation of all parts of country in economic growth

It is thus clear that the thrust of India’s development strategy is inclusive and balanced growth. It is not quite just like a big push growth, it is what I would prefer to call is penetrative growth model or policy-driven growth strategy which I think is much more effective and is working well for the Indian economy.

This is like identifying factors that keep the economy moving despite all challenges posed to it from the domestic and global economy and take effective and timely measures to keep them on track. Digital literacy and UPI are very apt examples. Direct cash transfer, free food, toilets and housing for the poor is another. Production Linked Incentive scheme is yet another. And the list is so big that it may require volumes to document them all at one place! This is like managing demand and supply forces both at the same time and this I think is the reason why Indian economy has shown tremendous degree of resilience even under the most difficult challenges posed to it in the recent times.

Implementation of Strategy for Amrit Kaal (75-100 years of independence) of India

The Strategy for growth entails adoption of economic policies that:

1. foster and sustain growth: (a) facilitate inclusive and sustainable development, (b) improve productivity, and (c) create opportunities for all to fulfil their aspirations.
2. Focusing on ‘Reform, Perform, and Transform’ for implementation of next generation reforms through consensus with the states and stakeholders.
3. Supporting MSMEs through access to timely and adequate finances, relevant technologies and appropriate training to grow and also compete globally.
4. Promoting energy security in terms of availability, accessibility and affordability.
5. Strengthening of the financial sector in terms of size, capacity, skills and regulatory framework.
6. Adoption of bottom-up approach to Development
7. Keep focus of the development strategy on implementation of development programs right at the district levels. This is going to promote balanced growth in India. The main aspirational programs being implemented at the district levels are: (a) PM Awas Yojana (Grameen) : The government is going to increase the number of people residing in brick and mortar houses from 3 crores to 5 crores in the next 5 years. (b) Over one crore households to be enabled to obtain up to 300 units free electricity every month through roof-top solarization: It will not only save electricity bill charges to them but they will also be able to sell the surplus to the distribution companies. (c) supporting charging of electric vehicles by creating entrepreneurship opportunities for a large number of vendors for supply and installation
8. Promoting health programs: (a) Encourage vaccination for girls in age group of 9 to 14 years for prevention of cervical cancer.  (b) One comprehensive program for synergy in implementation of various schemes for maternal and child care. (c) All ASHA workers, Anganwadi Workers and Helpers to be brought under Ayushman Bharat (public insurance) scheme.
9. Promoting agriculture and food processing which is the primary source of livelihood in India through greater formalization by improving credit linkages for farmers, reducing post-harvest losses, and improving productivity and incomes.
10. Promoting woman empowerment and self-reliance through SHGs.
11. Adoption of new age technologies and data to enable new economic opportunities and facilitating provision of high-quality services at affordable prices for all, including those at ‘bottom of the pyramid’.
12. Promoting Research and Innovation for catalyzing growth, employment and development.

The focus of the development strategy is to promote all round development of Indian economy by addressing the requirements of the Demography, Democracy, and Diversity of this dynamic (vibrant) economy. The thrust is to adopt action plans to foster development of all types of infrastructure – physical, social and financial in all parts of the country, more so in areas which need more of them.

Capex is a big driving force to the Indian Economy

The capital expenditure outlay has trebled in the past 4 years resulting in huge multiplier impact on economic growth and employment creation and the outlay for the next year is being increased by 11.1 per cent to eleven lakh, eleven thousand, one hundred and eleven crore rupees (Rs 11,11,111 crore). This is estimated to be 3.4 per cent of the GDP.

India has a huge and diverse population. It is predominantly agrarian economy having a large consumer base, Digitalization and formalization of the economy is fast changing the ways Indians work and live. Development of infrastructure is contributing to connectivity of remote areas to consumer and factor markets. Consistent increase in government capex is actually driving in investment and propelling the economy on a virtuous cycle of growth.

Dedicated economic railway corridors are being constructed for the seamless connectivity of critical inputs such as energy, mineral and cement with modes of transport and with ports in particular. These projects are expected to improve logistics efficiency and reduce cost, decongest high-traffic corridors and improve operations of passenger trains. This will also ease movement of traffic across National Highways which are being enlarged and extended with terrific speed to provide better connectivity of even remote areas to facilitate movement of goods and inputs to the consumption and factor markets.

Sustainable Development Goals

New schemes of regenerative principles-based manufacturing such as bio-manufacturing and bio-foundry are being launched to provide environment friendly alternatives to erstwhile consumptive manufacturing paradigm. This is likely to promote green economy and help the economy to achieve sustainable development goals. The budget envisages the following measures for ‘net-zero’ by 2070:

• viability gap funding for harnessing offshore wind energy potential
• install coal gasification and liquefaction capacity of 100 MT by 2030 to increase availability natural gas, methanol, and ammonia domestically.
• make blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes mandatory.
• provide financial assistance for procurement of biomass aggregation machinery to support collection.
• expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure and adoption of e-buses for public transport networks
• promote climate resilient activities for blue economy

Amrit Kaal as Kartavya Kaal

The budget includes an appeal to the masses to support the government’s initiatives towards strengthening and expanding the economy to achieve high growth rates and creating conditions for people to realize their aspirations. The Amrit Kaal is aligned with ‘Kartavya Kaal’ which could be translated as the obligation to perform duties through better economic management and good governance to keep India moving ahead with momentum as well as resilience.