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Dear Readers

On 15th August 2024 Bharatwasi will celebrate Independence Day with patriotic fervour by paying homage towards Bharat Mata.  On 19th August we will celebrate Raksha Bandhan, the festival of love and affection between sisters and brothers, when sisters tie Rakhi to their brothers wishing him happiness, health and longevity. On the other hand, brothers wish happiness for their sisters, promising them protection for life. Further, the birth of Supreme Lord Krishna will be celebrated on 26th of this month. Lord Vishnu incarnated as Lord Krishna to uphold righteousness, peace, abundance and happiness all around. Lord Krishna, though being the incarnation of Lord Narayana, reared cattle’s Himself giving importance to Animal Husbandry and Farming. Krishna is also known as Gopala (protector of the cows).

Cover Story: This year’s budget emphasises on the roadmap to build a Viksit Bharat. FM Sitharaman presented the budget for FY24-25 on 24th July 2024. The budget emphasises on inclusive growth which should be faster with focus on agriculture, employment, human skill development, women empowerment, controlling fiscal deficit and inflation.

As per Economic Survey 2023-24, Artificial Intelligence (AI) will affect the number of jobs in the BPO sector of India. India needs to generate on an average around 7.85 million jobs annually until 2030 in the non-farm sector. People need to get skilled as well. Businesses will have to balance capital deployment and employment generation. Further, this year’s budget gave emphasis on agriculture to make India Atmanirbhar by 2047. To curb import of pulses and oilseeds, the finance minister’s speech pointed out that for achieving self-sufficiency in pulses and oilseeds, the government will strengthen their production, storage and marketing.

Rise in prices of pulses and other food grains affects household budgets thereby decreasing consumption expenditure, thereby affecting health and the pace of growth of the economy.

This year’s budget has redefined the international monetary transaction norms. Foreign companies will get tax relief. Increasing the tax rates on LTCG and STCG will dent the savings which are already declining with an increase in the household debt. The ultimate effect will be on investment. Remitting money overseas for foreign securities, overseas funds, children’s education,etc. have been made easier.

Income Tax Act and rules have not been simplified despite repeated promises, except for extending some small relief through restructuring income tax slabs under the new tax regime. GST guidelines are also not being rationalised.

Tax payers are not happy at not getting the expected relief. Investing abroad has been liberalized up to USD 250,000 in a financial year under the Liberalised Remittance Scheme. Overall, the budget is progressive aiming to boost the overall economy and reassure government commitment towards sustainable growth.

Indian Economy: IMF has upgraded India’s GDP growth forecast by 20 basis points to 7% for FY25. It retains the country’s growth forecast for FY26 at 6.5%. India’s Balance of Payment recorded a surplus of USD 5.7 bn. Further, IMF has forecast 2024 GDP growth rates of 5% for China, 2.6% for US and 0.7% for UK. RBI projects India’s GDP growth of 7.2%, slightly higher than IMF. Rating Agency CRISIL projects India’s GDP growth at 6.8% in FY25.

RBI governor Shaktikanta Das says the country is moving towards an annual growth rate of 8% in a sustained manner. RBI now is focusing on controlling inflation. There is a need to have growth in all the sectors of the economy. For FY24, Provisional figures indicate that the debt has reached `171.78 trillion, or 58.2% of GDP. Easing debt ratio has been one of the key announcements of the latest budget. The budget estimates the debt to rise to ` 185.27 trillion, or 56.8% of GDP in FY25. This projection aligns with the government's plans to sustain economic growth while managing fiscal deficits.

Global Rating Agency Moody’s said that the bank credit in India will grow by 12-14% y-o-y till FY25, lower than that of FY24, largely due to lower pace of deposit growth and hike in risk weights. External debt increased by about 6% y-o-y to USD 663.8 bn as on March 2024 against USD 624.1 bn as on March 2023.

IBC: In view of the global and domestic uncertainty businesses will be affected by external factors. Businesses being affected temporarily thereby making delayed payments or defaulting temporarily should be allowed to restructure their debts and given enough time to recover, instead of taking immediate recourse to the IBC process and strip off the wealth creator of their hard earned capital and fruits of hard work.

When trying to figure out whether a defaulter has been a willful one, consideration should be given to the borrower's past performance and not just a few particular transactions or situations.

Global Economy: Despite the numerous shocks brought on by the ongoing trade sanctions between the US and China, Russia-Ukraine and Israel-Hamas wars, political trade instruments, and rivalry in technology, global commerce has proven robust. The rate of global growth has definitely fluctuated as a result of these events, but those variations were transient. The first quarter of 2024 has shown encouraging patterns for both products and services, which are expected to continue their modest growth from the second half as well. It is anticipated that the increasing trend will continue for the upcoming year due to the moderating of global inflationary trends.

Conclusion: India needs to have more open trade policies. Honourable PM Modiji said the speed and scale of development the government executes will be guided by a ‘Nation First’ approach. He also requested the people at large to cease this golden opportunity of achieving the goal of Viksit Bharat by 2047. According to Honourable Vice President Shri Jagdeep Dhankar the idea of Viksit Bharat is a spiritual mission rather than just an objective.

The country is on the way to becoming the world’s 3rd largest economy. Wealth creators are the driving force behind our growth story. Therefore, the government should understand the pains of wealth creators. There are some policies which are killing the animal spirit for taking risks of the wealth creators. External factors, both domestic and global, should be actively followed and taken into consideration while running an enterprise. Hardworking entrepreneurs and wealth creators are building this country. But the government is ignoring their plight when they get affected by external factors. The families are being pushed to peril and become extinct. Hard working entrepreneurs creating wealth are becoming averse to risk.