Union Budget 23-24 And The 9-year Trendline
When we see Budget 23-24 in the context of budgets over the last eight years, you see a pattern. The first is about direction. The undertone is one of growth and making necessary investments to boost growth and being fiscally prudent at the same time. This gives us the confidence that India is on a firm growth path and achieving a USD 7-trillion economy by 2030 is more assured than before.
Second, what strikes you is consistency. Inclusion, agriculture, rural, housing, reforms, divestments, infrastructure. Only when we stay committed to a theme over an extended period, we make an impact. Like in cricket, the coach always says “follow through” with the shot is important as the shot itself.
Capex Continuity
For instance, capital expenditure of the Union government has increased handsomely every single year since 2014 and has not been compromised to meet an electoral year, for instance. Capital expenditure is any expenditure to buy a non-current asset, i.e. any asset that has more than one-year life. Capital expenditure has increased four times from Rs 2.5 lakh crore in 2016 to Rs 10 lakh crore in FY2024, and hopefully will be Rs 25 lakh crore in 2029. This will be used to build roads, bridges, ports, railways. Investment in railways was Rs 2.4 lakh crore, a whopping nine times that of investment in railways in 2014!
Improved infrastructure reduces our cost of transportation, increases competitiveness of our products in international markets and reduces pollution. We can then have a fundamentally competitive economy and compete in global markets at global terms. My driver at Delhi told me that the travel time to Haridwar has reduced from 5 hours to 3.5 hours, to Chandigarh from 6 hours to 4.5 hours and to Agra from 4 hours to 3 hours. Think of the reduced annuity fuel burn on millions of vehicles and improvement in green economy by these initiatives.
The total length of our national highways, for instance, has massively increased from 91,287 km in FY14 to 1,44,634 km in FY23. Remember these are our national assets and will continue to power GDP growth into eternity.
The Green Goal
Third, this time we saw more emphasis on “green” economy. Green fuel, green energy, green farming, green mobility, green buildings, and green equipment, and such green growth efforts was a highlight of the Budget. This will also create green job opportunities. I heard the PM emphasise the green economy. In a post-Budget interaction, I heard Mr Gadkari put it emphatically in words that are still ringing in my ear -- “Jal, Jameen, Jangal, Jaanwar” being a focus for the government. We do live with nature and this focus is endearing.
There is also consistency in corporate income tax rates, at 25 per cent since 2020. Personal income tax rates are low, and someone earning say Rs 15 lakh a year will only pay 10 per cent as income tax.
I would like to point out that such investments do reach the last man through the contractor, vendor, employee of the contractor and so on, but with a capital asset to grow the economy in the future.
Finally, I can say from experience that when we meet foreign investors from the US, UK, Singapore, HK, etc. they talk about India with a lot of respect, and we talk about India with a lot of pride. That sums it up.
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