The Budget Ignores the Demand Constraints

The Union Budget for 2023–24, which, according to the finance minister, is the first budget of amrit kaal, got off to a very inauspicious start. The expected positive vibes from the stock markets were roiled by the sharp fall in the stock prices of one of India’s largest business conglomerates. But the government remained unfazed as both industry lobby groups and right-wing economists came all out to laud the budget.

The lobby groups were happy that the finance minister had abstained from mobilising additional resources or allocating more funds for supporting small entrepreneurs or new welfare programmes. The economists were generally satisfied by the fiscal correction efforts in the budget, which ensured that the deficit parameters continue to glide down. They unitedly hailed the marginal increase in the budget allocations for capital spending, by 0.6% of the gross domestic product (GDP), claiming that this will crowd in private investments and help accelerate growth.