The Hindu Editorial Summary
Editorial Topic : Budget for 2024-25
GS-3 Mains Exam : Economy
Revision Notes
Growth Targets:
- Presented on July 23, 2024
- Short-term target: Minimum 7% GDP growth
- Medium-term target: Sustained real GDP growth rate of 7%-7.5%
Fiscal Deficit:
- Aim to bring fiscal deficit down to FRBM target of 3% of GDP within 3-4 years
Investment and Savings:
- Required real investment rate for 7% growth: 35% of GDP
- Current real investment rate (GFCF): 33.3% (FY23) & 33.5% (FY24)
- Saving to GDP ratio (FY23): 30.2% nominal, 32.8% real
- Need for marginal increase in savings and investment rates
Growth Drivers:
- Domestic growth focus due to continued global economic shutdown
- Emphasis on labor-intensive sectors for job creation
Budgetary Considerations:
- Expected revenue improvement from tax and non-tax sources
- Nominal GDP growth projected at 11% (7% real, 3.8% inflation)
- Tax revenue target: Rs. 38.8 lakh crore (after state share)
- Non-tax revenue boost from Rs. 2.11 lakh crore RBI dividends
Conclusion:
- Budget needs to balance growth with price and fiscal stability
- Commitment to FRBM targets will reduce debt burden and facilitate fiscal consolidation
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