In an election year, it is heartening to see that the Finance Minister delivered an interim Budget that reflects the government’s steadfast commitment towards fiscal prudence and its unwavering focus on structural reforms, infrastructure development, and inclusive growth. For that, I would like to applaud the FM and the government.

The fiscal prudence has been amply demonstrated through declining current account deficit, falling headline inflation, rising GST collections, and improving bad loan ratios, thus narrowing our estimated fiscal deficit to 5.8 per cent of GDP in 2023-24, and further to 5.1 per cent for 2024-25, bringing us a step closer to the government’s ultimate target of 4.5 per cent by 2025-26.

In fact, the gross borrowing announced was lower by ₹1-1.2 lakh crore at ₹14.13-lakh crore, against market expectations of ₹15-15.4-lakh crore. This immediately led to a rally in long-end G-secs. Further, during this calendar year we expect FPIs to invest $30-35 billion in G-secs on account of India’s inclusion in global bond indices, thus reducing the overall cost of government borrowing. New FPIs will be able to enter India’s debt market at internationally competitive yields.

It is reassuring to see that the government has increased capital investment outlay for the fourth time in a row allocating ₹11.1-lakh crore, an improvement of 11.1 per cent over last year’s 33 per cent increase. This in conjunction with expected private capital expenditure which will continue the infrastructure build-out across the nation, driving economic growth and generating employment opportunities.

The three major economic railway corridor programmes — (a) energy, mineral and cement corridors, (b) port connectivity corridors, and (c) high traffic density corridors – under the PM Gati Shakti initiative will improve logistics efficiency and reduce costs to 8 per cent, as envisaged in the National Logistics Policy.

Under the leadership of the Prime Minister, our country has witnessed three consecutive years of 7 per cent+ growth, making it the fastest growing G20 economy. India has emerged as one of the most preferred destinations for global investors. In the last 10 years, our FDI inflow has doubled to $596 billion from 2005-2014. Following India’s G20 presidency, many countries have expressed interest to invest in India and our government is negotiating bilateral investment treaties, which will accelerate foreign inflows into India.

The Budget is also focused on furthering India’s commitment to net zero by 2070. Encouraging adoption of e-buses for public transport; strengthening e-vehicle ecosystem by supporting manufacturing and charging, phased mandatory blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas for domestic purpose are measures in the right direction.

The Nari Shakti initiative will continue to gain momentum as more female students enroll in secondary schools and for STEM education. Focus on women entrepreneurship, backed by Mudra loans, will surely strengthen the government’s empowerment agenda.

Overall, I believe this interim Budget stuck to prudence rather than falling prey to populism and has continued India’s march to become the third largest economy in the world.

(The writer is India Country Executive, Bank of America)