Full Budget 2024, Goldman Sachs note on expectations : What will be the inclination of the first budget of the third term of the Modi government? Will the government increase its expenditure on welfare schemes and subsidies? Or will the huge amount received as dividend from the Reserve Bank be used to reduce the fiscal deficit while keeping the expenditure balanced? Will the government focus more on capital intensive infrastructure projects or will encouraging industries that increase employment be its priority? All these questions are in the minds of the people before the full budget to be presented on July 23, on which economists of global brokerage firm Goldman Sachs have put their opinion in front of everyone.
Goldman Sachs economists have presented their expectations about the upcoming full budget in detail in a note released on Monday. This note says that the Modi government’s new budget will have a bias towards welfare expenditure, but along with this, special attention will also be given to generating more employment and infrastructure related to agriculture.
Goldman Sachs’ 10 big expectations from the budget
1. Emphasis on manufacturing to increase employment: Goldman Sachs expects that the budget will focus on increasing textiles, readymade garments and other labor-intensive manufacturing activities that promote employment. Fiscal incentives can be given to increase employment opportunities in these sectors.
2. Support for small and medium industries:The budget is expected to enhance credit facilities and other financial support for micro, small and medium enterprises (MSMEs) as these enterprises are crucial for job creation and economic stability.
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3. Increasing the exports of the service sector:In the upcoming budget, the government can also put a lot of emphasis on promoting the exports of the service sector. Particular attention can be given to the expansion of Global Capability Centers (GCC). Doing this is very important in order to further strengthen India’s already strong position in the global market of the service sector.
4. Investment in agriculture infrastructure:It is expected that the government may increase investment in agricultural infrastructure in the budget to deal with the high level of food inflation. This includes steps such as construction of facilities like cold storage, expanding the irrigation network and setting up grading and sorting units.
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5. Improving the food supply chain: To reduce fluctuations in food prices, the government may focus on improving the domestic food supply chain in the upcoming budget. This includes promoting investment in the expansion of activities like food processing, dairy cooperatives and fisheries.
6. Slum Re-development and Housing :The budget is likely to prioritise slum redevelopment in major cities and take steps to ease approvals for housing projects. The provision of clean drinking water for both rural and urban areas is also likely to be given special emphasis in the budget.
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7. Energy Security :According to Goldman Sachs, special provisions can be made for the country’s energy security in the upcoming budget. Along with this, the government can also focus on encouraging measures to move towards green energy.
8. Development of infrastructure :Infrastructure development, especially the railway network, is expected to receive a lot of attention in the budget. Special provisions may also be made in the budget for laying new railway tracks in the eastern and north-eastern regions of India.
9. Insurance for unorganised workers :A new scheme may also be introduced in the budget to provide insurance facilities to unorganized sector workers including taxi, truck and three-wheeler drivers. This can be done as part of the government’s effort to extend the benefits of social security to as many workers as possible.
10. Use of RBI Dividend:Despite the high public debt, the government has got a lot of relief due to the huge dividend of Rs 2.1 lakh crore given by the Reserve Bank of India (RBI). This amount is almost double the estimates. The government can use this money to increase capital expenditure, welfare schemes and subsidies. Along with this, the government would also like to keep the fiscal deficit within the target of 5.1 percent.
Balancing development and welfare
Goldman Sachs believes that in the upcoming budget, Modi governmentIt will try to maintain a balance between growth and welfare. That is, along with welfare schemes, expenditure can also be increased on economic incentives. Along with this, the government is also expected to make efforts to reduce unemployment and inflation in the budget. For this, priority will be given to those sectors which can contribute to increasing employment opportunities and stabilizing prices while maintaining fiscal discipline. Along with this, the Modi government can also present its long-term thinking or view in the matter of economic policy and public finance.