1 March 2024, 11:03 PM

March 2024: Interim Budget 2024-25: FM relies on infrastructure spending to boost growth

March 2024: Interim Budget 2024-25: FM relies on infrastructure spending to boost growth

“The Indian economy has witnessed profound positive transformation in the last ten years. The people of India are looking ahead to the future with hope and optimism” was how FM Sitharaman opened her interim Budget speech for 2024-25.

The UN World Economic Situation and Prospects (WESP) 2024 report released last January, said that gross domestic product in South Asia is projected to increase by 5.2% in 2024, driven by a robust expansion in India, which remains the fastest-growing large economy in the world.

“Growth in India is projected to reach 6.2% in 2024 amid robust domestic demand and strong growth in the manufacturing and services sectors,” the report said. India’s GDP is projected to increase to 6.6% in 2025.

The Reserve Bank of India has appeared more optimistic and projected a 7% GDP growth for the next fiscal. The Indian economy continues to sustain the momentum achieved in the first half of 2023-24, going by high frequency indicators, the central bank has observed.

Overall, investment intentions of the private corporate sector have been positive this year so far. Total cost of projects, for which loans were sanctioned by major banks/all-India financial institutions (FIs) stood at ₹2.4 lakh crore during April-December 2023, which was 23% higher than that in the corresponding period last year, the bank said.

The International Monetary Fund in its World Economic Outlook released last January predicted that India's economy is likely to grow at 6.5% in the financial year starting 

April 1, 2024 and at a similar pace the year after. The bank has also revised its projections for GDP growth in the world's fifth largest economy during the current financial year to 6.7% from 6.3% in October, 2023.

The strong growth projection for India came even as the report projected that growth in the wider region of "developing Asia" will decline to 5.2% in 2024 and 4.8% in 2025 from an estimated 5.4% in 2023. India is expected to contribute over 16% of global growth as economic reforms in key sectors like infrastructure and digitalisation have made India a "star performer" among countries, IMF has said,

Interim Budget 2024-25

On the backdrop of this positive economic outlook Nirmala Sitharaman presented the interim Budget for 2024-25. Her job this time was considerably easier with the economy growing rapidly, tax collections surpassing projections and the corporate sector once again turning positive about the future growth projections.