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Updated February 5th, 2024 at 13:58 IST

Budget reinstates government’s focus on inclusive growth: IBA

The interim budget, according to Goel, holds promise for the economy by creating more opportunities for the lower echelons of the socioeconomic pyramid.

Business Desk
Union Budget 2024
Interim Budget 2024 | Image:Shutterstock
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A K Goel, Chairman of the Indian Banks' Association (IBA) and Managing Director & CEO of Punjab National Bank, expressed positivity, stressing that the budget reinstates the government's commitment to inclusive growth and sustainable development.

The interim budget, according to Goel, holds promise for the economy by creating more opportunities for the lower echelons of the socioeconomic pyramid. He highlighted the increased focus on infrastructure spending for development, measures aimed at achieving Net Zero by 2070, and a clear emphasis on fiscal consolidation.

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One of the key takeaways from the budget, as outlined by Goel, is the government's commitment to inclusive growth through social schemes like PM Svanidhi, PM Kisan Samman, PMAY, and PM Mudra Yojana. These schemes, he noted, have provided crucial relief to sectors in need, with banks playing a pivotal role in their implementation.

Goel applauded the achievements of Direct Benefit Transfers facilitated through banks, amounting to Rs 34 lakh crore, leading to a substantial saving of Rs. 2.7 lakh crore. The budget proposals align with environmental sustainability, with initiatives such as the adoption of e-buses for public transport, support for the e-vehicle ecosystem, and the launch of a new scheme for bio-manufacturing and bio-foundry to promote eco-friendly alternatives.

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Addressing the economic growth perspective, Goel welcomed the increased capital spending proposed by the government in the interim budget. The allocation for capital expenditure for FY 25, at Rs 11.11 lakh crore, represents an 11.1 per cent increase over the capex for FY24. He said that this investment in infrastructure would have a cascading effect on employment and benefit ancillary industries supporting the infrastructure sector.

Furthermore, Goel commended the government's decision to waive disputed direct tax demands ranging from Rs 10,000 to Rs 25,000 until 2009-10, providing relief to taxpayers.

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Looking at the fiscal aspect, he highlighted the reduced gross borrowing for FY 2025, estimated at Rs 14.13 lakh crore compared to Rs 15.4 lakh crore for FY 2024. This reduction in the government's borrowing programme is expected to create more space for banks to provide credit for growth.

Goel also commended the government's commitment to fiscal consolidation, with the fiscal deficit for FY 24 projected to be 5.8 per cent of the GDP, slightly lower than the budget estimate of 5.9 per cent. The projected fiscal deficit for FY 25 is set at 5.1 per cent of GDP, sending a positive signal to the market, according to Goel.

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Published February 1st, 2024 at 18:48 IST

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