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As India sets its sights on becoming a $5 trillion economy, fiscal measures play a pivotal role in steering the trajectory of India economic growth. The anticipation is high as the upcoming Budget, though a Vote on Account, is expected to lay the groundwork for the comprehensive fiscal strategy that will unfold in the full Budget for FY25.
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Top 30 Fiscal Measures Being Considered to Propel India Economic Growth towards a $5 Trillion Economy
Here are the top 30 fiscal measures being considered to give further impetus to India economic growth:
1. Strategic Sales of PSUs for Aggressive Capital Expenditure
There is enormous significance of strategic sales of Public Sector Undertakings (PSUs). The proceeds would be channeled into increasing capital expenditure, particularly vital for boosting the manufacturing sector’s GDP share.
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2. Manufacturing Sector Revitalization
It is essential to focus on the manufacturing sector to generate rural and semi-urban jobs. Analysts believe that a strategic approach, coupled with increased capital expenditure, can elevate the manufacturing GDP share, which currently stands at 18-20%.
3. Balancing Fiscal Responsibilities and Growth-Oriented Initiatives
Analysts, including Aditi Nayar, Chief Economist at ICRA, anticipate a balanced approach in the upcoming Budget. With the BJP’s recent electoral success, the budget is expected to strike a balance between fiscal responsibility and India economic growth-oriented initiatives.
4. Populist Measures for Rural and Lower Strata
Ashutosh Tiwari, Managing Director at Equirus, foresees a budget that not only focuses on India economic growth but also includes populist measures. Women welfare schemes, like Ladli Behna in Madhya Pradesh, might take center stage, addressing the needs of the rural and lower strata affected by post-Covid distress.
5. Accelerated and Sustainable GDP Growth through Infrastructure Investment
There is a need for accelerated and sustainable GDP growth. This can be achieved through higher infrastructure investment and fiscal prudence.
6. Asset Demonetization for Fiscal Prudence
The path to fiscal prudence involves asset demonetization. This strategic move could pave the way for sustainable India economic growth.
7. Level Playing Field for Savings Products
In addition to GDP growth, it is important to make the field even for various products for savings from disclosure, tax, and investor protection perspectives.
8. Reduction in Corporate Tax Rate and Pro-Business Reforms
The government’s prior reforms, including a significant lowering in the corporate tax rate, GST, IBC, and schemes like Make in India and Start-up India, have set the stage for India economic growth. Sustaining and building upon these reforms is crucial.
9. Inclusive Growth and Digital Economy Promotion
The government has created a solid roadmap for making India a $5 trillion economy. This includes a focus on inclusive India economic growth, promoting the digital economy, fintech, and technology-enabled development.
10. Capex-Led Growth Strategy
The government’s commitment to a growth strategy led by capex is another pleasing fact. The substantial increase in capital investment outlay, reaching 3.3% of GDP (₹10 lakh crore), is indicative of this approach.
11. Infrastructure Development and Public-Private Partnerships (PPPs)
A robust infrastructure is the backbone of India economic growth. Increased allocations and strategic partnerships with the private sector in key infrastructure projects can pave the way for improved connectivity, logistics, and overall economic efficiency.
12. Focus on Research and Development (R&D) Initiatives
Investments in R&D can fuel innovation, making India more competitive on the global stage. Allocating funds for research, fostering collaboration between industries and research institutions, and incentivizing innovation can drive India economic growth.
13. Export-Led Growth Strategies
Boosting exports is a key driver for Indian economic growth. Implementing policies that facilitate easier export processes, providing incentives for exporters, and identifying high-potential export sectors can contribute significantly to achieving the $5 trillion goal.
14. Skill Development and Education Reforms
A skilled workforce is crucial for sustained India economic growth. Investing in skill development programs and introducing reforms in the education sector to align curriculum with industry needs can enhance employability and productivity.
15. Digital Transformation and E-Governance
Embracing digital technologies can enhance efficiency, transparency, and accessibility. Promoting e-governance initiatives, digital payment systems, and fostering a digital ecosystem can streamline processes and drive India economic growth.
16. Green Initiatives for Sustainable Development
Environmental sustainability is integral to long-term economic prosperity. Implementing green initiatives, incentivizing sustainable practices in industries, and promoting clean energy solutions contribute not only to India economic growth but also to global sustainability goals.
17. Financial Inclusion and Banking Reforms
Ensuring access to financial services for all sections of society can stimulate economic participation. Implementing banking reforms, expanding financial inclusion programs, and promoting digital financial services can empower citizens and drive economic activity.
18. Healthcare Investments and Pandemic Preparedness
The COVID-19 pandemic highlighted the importance of a robust healthcare system. Increased investments in healthcare infrastructure, research, and pandemic preparedness can safeguard public health and contribute to economic resilience.
19. Smart Urbanization and Rural Development
Balanced development between urban and rural areas is crucial. Implementing smart urbanization projects, coupled with initiatives for rural development, can create a harmonized India economic growth trajectory, reducing regional disparities.
20. Tax Reforms and Simplification
A transparent and simplified tax regime can attract investments and foster a business-friendly environment. Continuing efforts towards tax reforms, reducing complexity, and ensuring consistency in tax policies contribute to a nice economic environment.
21. Promotion of Small and Medium Enterprises (SMEs)
Empowering SMEs through targeted policies, access to credit, and simplified regulatory frameworks can stimulate entrepreneurship, job creation, and contribute significantly to India economic growth.
22. Investment in Digital Infrastructure
A digital-first approach requires robust digital infrastructure. Investing in high-speed internet connectivity, cybersecurity measures, and digital literacy programs can foster a tech-savvy economy.
23. Incentives for Foreign Direct Investment (FDI)
Creating an attractive environment for foreign investors can infuse capital, technology, and expertise. Providing incentives, easing regulatory hurdles, and ensuring a stable policy environment can boost FDI inflows.
24. Labour Reforms for Flexibility and Efficiency
Flexible and efficient labor markets can enhance productivity. Introducing reforms that balance worker rights with the need for business flexibility can attract investments and improve overall economic efficiency.
25. Public Health Infrastructure Strengthening
Apart from pandemic preparedness, strengthening overall public health infrastructure, including hospitals and healthcare facilities, is crucial for a healthy and productive workforce.
26. Easing Land Acquisition Processes
Simplified and transparent land acquisition processes can expedite infrastructure projects. Clear guidelines, reduced bureaucratic hurdles, and fair compensation mechanisms can encourage private investments in infrastructure.
27. Smart Agriculture Initiatives
Revitalizing the agricultural sector through technology adoption, irrigation improvements, and market linkages can enhance farmer income, contribute to GDP, and ensure food security.
28. National Innovation and Startup Ecosystem Support
Nurturing innovation and supporting startups can drive economic dynamism. Establishing innovation hubs, providing funding support, and creating a proper regulatory environment can foster a thriving startup ecosystem.
29. Enhanced Social Security Programs
Strengthening social security nets can provide a safety net for vulnerable populations. Targeted programs addressing unemployment, healthcare, and education can contribute to social well-being and stability.
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30. Trade Facilitation and Export Credit Assurance
Simplifying trade procedures, reducing export-related bottlenecks, and ensuring credit assurance for exporters can promote international trade, helping India tap into global markets more efficiently.
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Conclusion
As India navigates through economic complexities, the upcoming fiscal measures are poised to shape its journey towards the coveted $5 trillion economy. A forward-looking, adaptable approach, coupled with sustained efforts towards inclusive and sustainable India economic growth, will be instrumental in achieving this ambitious milestone.