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What experts say about interim Budget 2024

February 02, 2024 01:49 IST

Following are comments from economists at leading financial institutions, banks and rating agencies on the interim Budget:


Illustration: Uttam Ghosh/

Abheek Barua, Chief Economist, HDFC Bank

The interim Budget continues to focus on infrastructure building - setting an allocation of Rs 11.1 lakh crore for FY25, along with targeting inclusive growth.

The government continues to remain fiscally prudent, estimating the fiscal deficit at 5.8 per cent for FY24 and a further reduction in the fiscal deficit target to 5.1 per cent for FY25 in its effort to achieve the medium-term target of 4.5 per cent by FY26.


This is positive for the bond market.

Dipti Deshpande, Principal Economist, Crisil Ratings

The interim budget relies on a mix of capex and rural spending to bolster growth.

Growth in capex is slower, but its share in GDP is higher year-on-year, suggesting the continued dominant role of government investment.

The return of budgetary support to rural employment and incomes after a brief hiatus will support rural demand, which has turned sluggish of late.

Despite the rural focus and a pre-election setting, the budget refrains from being inflationary.

This also ensures a favourable setting for monetary policy.

In addition, a lower fiscal deficit and lower market borrowings will comfort government bond yields in the coming fiscal.

Rahul Bajoria, Economist, Barclays India

The interim Budget accelerates the fiscal consolidation programme with the ambitious 5.1 per cent fiscal deficit target for FY25, which should boost private capex, signalling a decisive focus on consolidation in the medium term.

Overall, we believe the government is serious about carving out more fiscal space: it has opted not to undertake significant populist measures despite impending elections and should continue to hold its strong track record of fiscal marksmanship.

Pranjul Bhandari, Chief Economist, HSBC India

The lower-than-expected borrowing of Rs 14.1 lakh crore (vs Rs 15.4 lakh crore in FY24) is made possible by fiscal consolidation, with net market borrowing falling a shade and also by using the GST cess funds for lowering repayments.

The role of small savings in funding fiscal deficit has risen over the last two years.

For FY25, the government has budgeted a 0.1 per cent of GDP rise in revenue, led by higher net taxes. On the expenditure front, it aims to lower the subsidy bill and other current expenditures by a total of 0.8 per cent of GDP.

Aurodeep Nandi, Economist, Nomura India

The interim Budget has hit a six on fiscal prudence as only a couple of runs are needed to win.

The 5.1 per cent fiscal deficit projection for FY25 marks a sharp cut from the current year and has surprised markets, which would have been happy to see it moderate to 5.2-5.4 per cent in a pre-election Budget.

Rajani Sinha, Chief Economist, Care Ratings

Lower gross borrowing amidst an anticipated interest rate reduction by the Reserve Bank and an increase in passive inflows into the debt market following the inclusion of G Secs into global bond indices are poised to result in a lower cost of borrowing for the entire economy.

This could catalyse private capex going ahead.

George Alexander Muthoot, MD, Muthoot Finance

The interim Budget is balanced from the point of view of adhering to fiscal prudence, boosting infrastructure growth, and prioritising focus on four key sections of the economy -- the poor, women, youth, and farmers.

Higher infra outlay will help boost the broader economy and in the long-term will boost investments.

Sudipta Roy, Managing Director, L&T Finance

By presenting a fiscally prudent Budget, the government has created conducive conditions for the private capex cycle revival.

Vishal Kampani, Non-Executive Vice Chairman, JM Financial

The interim Budget has laid the framework for robust growth with a continued focus on fiscal consolidation while balancing the infrastructure development and sustainability goals.

Refraining from being too populist, the government has targeted inclusive development by announcing measures that have a far-reaching impact on the economy.

Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance

The interim Budget is a balanced approach by the government.

The extension of tax breaks for startups until March 2025 and the focus on improving taxpayer services demonstrates the commitment to simplify taxation.

The allocation of interest-free loans to promote tourism is a positive step.

A Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC

The interim Budget speech clearly focuses on fiscal consolidation, infrastructure spending, consumption and capex.

Providing interest-free loans towards technology spending by the youth is a big positive.

Also, consumption will likely get a boost with the focus on the agri economy.

Abhay Bhutada, MD, Poonawalla Fincorp

The interim Budget is a decisive step towards economic sustainability.

Girish Kousgi, MD & CEO, PNB Housing Finance

The interim Budget is forward-looking and reflects a prudent fiscal policy.

The renewed focus on collective progress aligns seamlessly with the "housing for all" mission.

Tribhuwan Adhikari, MD & CEO, LIC Housing

The plan to build 2 crore more rural housing units is a commendable move in comprehensively addressing housing challenges, particularly for the middle class.

Ritesh Kumar, MD & CEO, HDFC Ergo General Insurance

The increase in capex outlay by 11.1 per cent will further enhance the pace of infrastructure development and create more jobs, providing a fillip to the higher growth trajectory.

Interim Budget 2024: Complete Coverage

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