In the corporate context, envision this Union interim budget as analogous to the CFO elucidating the CEO's strategy to the board. Instead of inundating board members with extensive data and figures, it effectively traces the evolution of today's presentation, delineating the entity's vision and key goals. The message conveyed in this interim budget is unambiguous—a political message with a policy intent, squarely focused on elevating four pivotal segments of society: the 'Garib' (poor), 'Mahilayen' (women), 'Yuva' (youth), and 'Annadata' (farmers). This strategic alignment resonates with the overarching goal of enhancing social and economic well-being, fostering enduring opportunities for citizens in the 'Amrit Kaal'.
With the upcoming national elections in April-May, there is a confidence that the same government is poised to secure its third term. This confidence was notably articulated by the Honourable Finance Minister in her budget speech. It is reasonable to anticipate that, contingent upon the depth of voters' confidence and electoral mandate they shower, the government may embark on more profound and potentially politically-sensitive reforms, particularly in areas such as land, taxation, and agriculture. For India’s growth trajectory, that reform is a must.
Over the past decade, there has been a noticeable shift in the mindset of the Indian population. The nation now believes in its own capabilities, not merely relying on what other nations can achieve. With a substantial young population, there is an imperative need to cultivate an ecosystem of development.
Throughout its ancient civilisations, Indian society has revered nature and its systems. Despite the distraction of embracing modern Western practices in the pursuit of being "cool", there is an acknowledgment that some sustainability-based practices may have been overlooked, but not entirely forgotten. For the first time, the Union budget has explicitly acknowledged "deep-tech", "ESG", "green economy", and "blue economy", although without providing detailed policy announcements. This potential signifies an upcoming emphasis on these themes in the Union budget, post the national elections.
There is a noticeable shift in people's mindsets towards waste, recycling, circular economy, and other sustainability-based behaviours. Companies are actively implementing initiatives like deposit return schemes for bottles. Efforts to clean up rivers are underway, with a hopeful prospect of addressing the flow of plastic into the oceans. The strategic urgency and economic imperative in achieving this are evident, especially considering India's extensive coastline, spanning over 7,500 km, which is susceptible to climate change-induced sea level rise and extreme weather events.
India’s journey towards achieving net-zero emissions reflect a steadfast commitment to sustainability and renewable energy. The nation has made substantial strides in the renewables space, with ambitious projects and policies aimed at expanding the share of clean energy in its power mix. India’s leadership in addressing global South climate issues is evident through its active participation in international climate forums. The nation advocates for the concerns and interests of developing countries, highlighting the need for equitable and inclusive solutions.
Initiatives addressing sustainable practices, renewable energy, and eco-friendly technologies are becoming integral parts of policy discussions. With an emphasis on circular economy principles, waste management, and ecosystem conservation, India is carving a path toward a more environmentally conscious and sustainable future. The focus extends to the blue economy, acknowledging the importance of sustainable use and conservation of marine resources. Policies aim to balance economic development with the protection and preservation of ocean ecosystems, ensuring a harmonious approach to maritime activities.
In the years ahead, India's journey towards achieving net-zero emissions is poised for significant acceleration through a robust ESG (Environmental, Social, and Governance) focus and unwavering commitment to climate action leadership. The Union budget's acknowledgment of "ESG" and "blue economy" signals a broader integration of sustainability principles, with mainstream financial sector. India's ambitious targets align with global efforts to combat climate change, emphasising renewable energy adoption, carbon neutrality, and the development of climate-resilient infrastructure.
India has experienced tax buoyancy, coupled with a shift in tax administration towards trust as the foundation. The improved tax-to-GDP ratio is a tangible outcome of the government's successful policy execution. The government has taken a proactive stance in channeling funds into infrastructure development, attracting private sector investments. As investment gains momentum, the fiscal space expands due to the contained borrowing programming of the Government of India. Maintaining a positive trend, the government's fiscal consolidation efforts remain intact. However, achieving the 4.5% fiscal deficit target by FY26 necessitates more proactive measures on revenue generation. Addressing a significant proportion of the Union budget dedicated to servicing interest payments becomes crucial for a sovereign rating upgrade.
Post the election, the PLI scheme is expected to gain policy traction, focusing on specialised manufacturing verticals rather than mass commoditised manufacturing, where India may lack a pricing edge. Anticipation of increased global investments into India after the national elections is supported by the existing enabling environment. Two milestones that could further enhance this movement are a sovereign rating upgrade and an improvement in India’s standing in the Ease of Doing Business. Deeper reforms, particularly in the form of judicial reforms, are imperative, especially to expedite commercial contract enforcement.
In the face of inevitable criticism, the focus should be on understanding the larger impact and how policies shape the social narrative. Positioned well, there is evident potential for further advancements. As we have seen over the past decade.
Srinath Sridharan is Policy Researcher and Corporate Advisor. Shailesh Haribhakti is an Independent Director on corporate boards.
The views expressed here are those of the authors and do not necessarily represent the views of NDTV Profit or its editorial team.
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