Union Budget 2024-25 – Soaring Ambition Neglected Foundation

Like the previous six Union budgets presented by her, Union finance minister Nirmala Sitharaman’s seventh consecutive budget has missed the opportunity to make adequate provision for foundational literacy and numeracy and basic education for India’s 265 million in-school children – writes Dilip Thakore Long-tenured finance minister Nirmala Sitharaman’s seventh consecutive Union Budget 2024-25 has attracted favourable comment from industry leaders, academics, media pundits and the commentariat, and brickbats from the rejuvenated opposition party leaders. As usual, industry spokespersons have lauded it. Especially for continuity and attention to macro-economic stability. They derive comfort from the BJP/NDA 3.0 government’s sizeable allocation for infrastructure capex (Rs.11.11 lakh crore of a total budget expenditure of Rs.48.21 lakh crore), overdue attention to boosting the growth of MSMEs (micro, small and medium enterprises) and skilling India’s youth to prepare them for gainful employment. On the other hand, leaders of opposition parties who received a new lease of life in General Election 2024 in which the BJP’s brute majority in the Lok Sabha was reduced to 240 from the earlier 303 (and the Congress party’s tally almost doubled from 52 to 99), have condemned Union Budget 2024-25 for paying little more than lip service to inflation and unemployment, especially of India’s huge youth population streaming out of education institutions. Media coverage of the budget has varied between sombre editorials and jokey coverage in dailies which report only parts of the budget. To provide a holistic picture of the latest income and expenditure balancing act of the BJP/NDA government which has been in power at the Centre since 2014, and especially to assess its provision for long-neglected education and human resource development that your editors believe is the essential precondition of national development, we present a holistic overview of Union Budget 2024-25. The objective is to evaluate the extent to which it will enable high potential but chronically mismanaged India to move towards attaining middle class nation status. Although in India, the ritual of drawing up the annual Union Budget is projected as an arcane and complex science, stripped down to basics, the budget of the Central government (and state governments) is essentially an income and expenditure balancing exercise, not very different from balancing budgets in households countrywide. As in every household, the task of government is to do its utmost to increase income to fund expenditure. Except that unlike private households, by virtue of its control of the Reserve Bank of India, the Central government has the power to print additional currency unlimitedly, i.e run up a fiscal deficit. Unlike Mr. Micawber (David Copperfield) who dreaded fiscal deficits (“annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness; annual income twenty pounds, annual expenditure twenty pounds naught and six, result misery”), governments don’t fear debtors prison. In Union Budget 2024-25, the fiscal deficit of the Central government is estimated at Rs.16.13 lakh crore, welcomed almost unanimously because it is on a “downward glide path” (4.9 percent of GDP cf. 5.6 percent in 2023-24), and…