• Tuesday, March 05, 2024

Asia

Singapore business community elated over Modi’s interim budget, says it will hit bull’s eye

Radhika Rao, senior economist at Singapore-based DBS Bank saw the budget as “prioritising pragmatism over populism” by focusing on higher capEx disbursements and faster fiscal consolidation.

A digital screen displays a broadcast of the budget speech by Indian finance minister Nirmala Sitharaman on the facade of the Bombay Stock Exchange (BSE) in Mumbai on February 1, 2024. (Photo by PUNIT PARANJPE/AFP via Getty Images)

By: Shubham Ghosh

THE business community in Singapore on Thursday (1) said the interim budget presented by Indian finance minister Nirmala Sitharaman in the parliament the same day “prioritising pragmatism over populism” and emphasising a sustainable budget for a developing India is sure to hit the bull’s eye.

“The idea of launching new programmes to develop the strength of our technologies is the need of the hour and I think Nirmala Sitharaman’s budget captures this aspect very well,” said Atul Temurnikar, co-founder and chairman of the Singapore-based Global Schools Foundation.

There is also a concerted effort to allocate more funds to the education sector which is a welcome sign, he said.

Read: Modi government’s interim budget 2024: The positives & not so positives

Presenting a vote on account for 2024-25 in the parliament, Sitharaman proposed no changes in income-tax rates for individuals and corporations, as well as customs duty.

She hiked capital expenditure to Rs 11.11 lakh crore (£105.7 billion) for 2024-25 while trimming the fiscal deficit for this financial year to 5.8 per cent, from the budgeted 5.9 per cent of GDP, and further lowering it to 5.1 per cent in the next fiscal.

Read: India interim budget 2024 in brief

“All in all, prime minister Narendra Modi government’s emphasis on a sustainable budget for a developing India is sure to hit the bull’s eye,” he told Indian news agency PTI.

Separately, Radhika Rao, senior economist at Singapore-based DBS Bank sees the budget as “prioritising pragmatism over populism” by focusing on higher capEx disbursements and faster fiscal consolidation.

The math not only projected a better-than-budgeted deficit target for the current year FY24 (year ending March 2024) but also pegged the FY25 goalpost at a narrower -5.1% of GDP (vs expectations of -5.3-5.4%), she noted.

By extension, gross and net borrowings are much lower than FY24 providing significant relief to the domestic debt markets, which will help keep a lid on the cost of borrowing and crowd-in the private sector, believes Rao.

“Despite the welfare focus on women, youth, poor as well as the farming community, the government refrained from outright populism, whilst maintaining a continued emphasis on capEx to improve the quality of spending,” she said.

(With PTI inputs)

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