The first full budget of the new government has laid a solid foundation for Viksit Bharat and will propel the nation forward on multiple fronts. A detailed document which outlined 9 priorities has set the tone for the next five years; and, manufacturing has been given its due which is heartening.
India’s economy has shown remarkable resilience, as evidenced by the Economic Survey 2023-24 which outlines optimistic picture. Robust real GDP growth rate of 8.2%, declining inflation at 5.4%, and an improved fiscal balance are all positive indicators of the economy’s health. The current geopolitical landscape, marred with rising tensions and a manufacturing void left by China, presents India with a golden opportunity. These crises have shed light on the importance of resilient and diverse supply chains, and India must grab this opportunity with both hands.
The nation’s industrial growth stands at 9.5% with manufacturing growing at an average of 5.2% per annum over the last decade. However, the journey towards becoming a global economic powerhouse requires continued reforms and strategic investments. The steps taken over the next five years will be crucial in realising India’s ambitions, and we can ill afford to falter in any way.
In this context, the continued stress in this budget on strengthening the domestic manufacturing ecosystem is crucial as it will lead to enhanced export competitiveness. While the Production Linked Incentive (PLI) Scheme has already shown impressive results, attracting investments of over Rs 1.28 lakh crore, generating Rs 10.8 lakh crore in production and sales, and creating 8.5 lakh jobs; complementary interventions and strategies will go a long way in providing a much-needed boost to manufacturing. The budget introduces three new employment-linked incentive schemes, including one particularly designed to boost job creation in manufacturing. These incentives will provide financial support to both employees and employers, benefitting 30 lakh youths entering the workforce and their employers over the next four years.