Building Viksit Bharat: A Step-by-Step Approach Through Budget Reforms and FTAs
The vision of Viksit Bharat by 2047 resembles the construction of a monumental edifice, requiring meticulous planning and execution at every level. Each annual budget serves as a crucial stepping stone toward this overarching goal, with recent initiatives demonstrating a clear path forward.
Infrastructure and Digital Transformation as Growth Catalysts
The government has prioritized infrastructure development through substantial budgetary allocations while accelerating digitalization and technology adoption across sectors. These strategic moves have begun to elevate India's potential growth rate, with the latest Economic Survey revising estimates upward by 50 basis points to 7 percent from the 6.5 percent projected three years earlier.
Economic reforms aimed at improving the business environment have gained significant momentum this fiscal year. The signing of multiple free trade agreements, including landmark deals with the United States and European Union, promises to stimulate domestic economic activity while diversifying India's trade partnerships.
Fiscal Prudence and Strategic Spending
In today's increasingly protectionist global landscape, maintaining fiscal discipline remains paramount. The budget continues the NDA government's commitment to fiscal rectitude, having already achieved medium-term deficit targets this fiscal year. For the upcoming fiscal period, the government has set a fiscal deficit target of 4.3 percent of GDP, aligning with international best practices for debt management.
The quality of government expenditure continues to improve, with emphasis shifting toward reducing revenue expenditure rather than capital spending as a percentage of GDP. Conservative estimates of 10 percent nominal GDP growth and achievable tax collections provide a stable foundation for these fiscal measures.
Manufacturing and Services Sector Development
The budget implements targeted support for both manufacturing and services sectors through strategic initiatives. Within manufacturing, the focus balances incentives for emerging sectors like semiconductors, data centers, biopharma, and electronics while maintaining support for traditional industries including textiles and MSMEs.
Tax reforms, rationalized customs duties, and streamlined import processes aim to achieve these objectives efficiently. According to industry projections, these new-age sectors could account for approximately 25 percent of India's industrial capital expenditure over the next five years, a significant increase from the 12 percent recorded between fiscal years 2021 and 2025.
Strengthening Services and Addressing Workforce Challenges
The establishment of a high-powered Education to Employment and Enterprise Standing Committee represents a strategic move to bridge skill gaps within the rapidly expanding services sector. Budgetary allocations and tax reforms specifically target tourism, healthcare, education, sports, and technology services.
Experiential tourism emerges as a particularly promising segment, attracting affluent travelers seeking unique experiences while generating employment opportunities in rural areas. The focus on medical and heritage tourism creates jobs that demonstrate relative resilience against workforce disruptions anticipated from artificial intelligence advancements.
As technological progress inevitably leads to job displacements across certain sectors, directing economic activity toward labor-absorbing services like healthcare and tourism becomes increasingly important for sustainable employment generation.
Strategic Divestment and Economic Stability
The government has substantially increased divestment targets to Rs 80,000 crore for the next fiscal year from approximately Rs 34,000 crore this year. Achieving these targets will require front-loaded efforts, given the challenges experienced in meeting divestment goals in recent periods.
Maintaining fiscal restraint ensures the budget remains non-inflationary, providing exactly the economic stability needed during uncertain global conditions. This comprehensive approach weaves together budgetary reforms, free trade agreements, and strategic sectoral focus into a cohesive growth framework for India's development journey.
