Armored with five notch jump in global GDP rankings, a staggering increase in the share of world’s foreign direct investment at 5.1 per cent, a voluminous weight in emerging market index and a walloping upsurge in the startup ecosystem calibrating India to a good third position in the world after US and China , India seems to be mastering the art of flaunting economic grace and poise ,much less jolted and jittered by the pandemic and the economic shocks ,in comparison to the rest of the world.
Radiating tremendous amount of confidence in the pace of the Indian economy, Prime Minister Narendra Modi has attributed India’s elevation as the fifth largest economy of the world, to its policy reforms over the last eight years. Soaring five ranks up from its position in the 10th row, the India’s composed economic standing helped it tide through the Covid pandemic, pumping a whooping amount of Rs. 3 lakh crores to the MSMEs sector and saving crores of jobs that were in crisis. According to State Bank of India (SBI) Research Ecowrap report, India is set to become 3rd largest economy by 2029, with its GDP likely to cross the current share of Germany in the Global GDP scale.
As per mass opinion, the composed performance of the Indian economy is also moulded by a plethora of far-sighted initiatives like the PM Awas Yojna, the PM Gareeb Kalyan Yojna, enhanced public funding to capital expenditure and stimulations of private investments. It is perhaps due to such growth seeking gestures, that in its Multidimensional Povert Index Report, the United Nations Development Programme and the Oxford Poverty and Human Development Initiative estimate that over 400 million Indians have broken free from poverty over the past 15 years and the share stands at 16 per cent now from its earlier count of 55 per cent of Indian population in 2005.
Another fillip to India’s growing stature in the global economic marathon, is the manoeuvring of its start-up ecosystem with the Prime Ministers Make-In-India and Digital India as its spinal backing. With an increased gross expenditure on R&D more than three times in the last few years, India today stands in the 3rd global rank in the Startup ecosystem race ,with a humongous count of over 80,000 start-ups presently in the country. Adding dimensions to the positivity of this development, 49 per cent of the start-ups are from tier-2 and tier-3 cities working in the fields like IT, agriculture, aviation, education, energy, health and space sectors
On Feb 1st next, India is gearing up for the presentation of the Union Budget 2025 with Finance Minister Nirmala Sitharaman is expected to deliver her eighth consecutive budget speech at 11 a.m. on that day. This makes for an opportune moment to look back at the changes in fiscal policies and institutions from 2014 to 2024.The decade saw several major institutional changes beginning with the introduction of the Goods and Services Tax (GST) in 2017.This mammoth move led to a near-complete overhaul of the indirect tax system. Similarly, the abolition of the Planning Commission lead to a paradigm shift in the expenditure allocation dynamics. The Fiscal Responsibility and Budget Management (FRBM)Act also underwent substantial facelift to facilitate a shift toward direct benefit transfers in most welfare schemes. Major fiscal policy changes like slashed Corporate Tax rates, a sharp rise in intergovernmental transfers from union to subnational governments and ambitious new schemes, such as the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and the Jal Jeevan Mission, also saw the light of the day.
Furthermore, over the past decade, India’s budgetary allocations have significantly improved across key sectors due to higher revenue generation, economic expansion, and a shift in priorities. While Capital Expenditure soared from Rs.1.2 lakh crore in 2013-14 to Rs.10 lakh crore in 2023-24, the Budget size nearly tripled, reflecting increased spending capacity due to higher revenues. On infrastructural expenditure, Roads & Highways allocation increased from Rs 31,000 crore in 2013-14 to a whooping Rs 2.7 lakh crore in 2023-24. Railways saw a similar mammoth jump to Rs 2.4 lakh crore in 2023-24 from a minimal Rs 26,000 crore in 2013-14. The massive investments in infrastructure to boost economic growth, jobs, and connectivity also saw a surge in monetary investment in Smart Cities & Urban Development section from 6,900 crore in 2013-14 to Rs 76,432 crore in 2023-24.
At this juncture, it is equally important to note the gigantic thrust in Defense & Security sector. Adding more firepower to these crucially important departments, the total defence budget in indigenous defense production, border security, and modernization witnessed a spike from a meagre Rs.2.03 lakh crore in 2013-14 to a good Rs.5.94 lakh crore in 2023-24 and further to more than 6 lakh crore in 2024.In 2024 the allocations increased by 8.6 per cent compared to 2023-24’s budget estimates, amounting to a total budget of Rs.6,21,941 crore after including pension, which is an increase of 7.1 per cent over 2023 budget estimate .Moreover the minimal expenditure in Modernization & Border Security also received a uplift to 1.62 lakh crore in 2024.
On the rural economy wing, ‘Agriculture & Rural Development’ saw increase from Rs 27,049 crore to Rs 1.15 lakh crore and MGNREGA allocations increased from Rs 33,000 crores to 60,000 lakh crores with higher direct transfers, modern farming incentives, and better irrigation. While Indira Awas Yojna in 2013 was allocated Rs 13,655.60 crores , the ambitious Pradhan Mantri Awas Yojna in 2023-24 financial year received a staggeringly increased allocation of Rs 79,000 crores.
The decade also witnessed improved emphasis on Educational and skill development with huge growth and massive expansion in digital infrastructure and focus on digital education, AI-based learning, and vocational training. Allocations in education increased to Rs.1.12 lakh crore from Rs.65,867 in 2013, to Rs 6000 crore. from Rs 1000 crore in Skill Development and from almost negligible to a humongous Rs. 4000 crores in Artificial Intelligence.
The scenario in health and social welfare sector saw a similar boost with increased allocation from Rs.37,330 crore in 2013-14 to Rs. 88,956 crores in 2023-24. Considered a success due to its significant impact on providing affordable healthcare access to millions of Indians, particularly low-income families, by significantly reducing out-of-pocket medical expenses, enabling access to life-saving treatments, and alleviating financial stress related to healthcare costs, Pradhan Mantri Jan Arogya Yojna received an allocation of Rs7,200 crores in 2024 Digital Economy & Innovation equally went through massive transformation in the last decade and with the conceptualization of Digital India economy by the incumbent government and allocations in the sector increasing from Rs. 3,000 crores to Rs.16,000 crore in 2024.
In a nutshell, the last 10 years saw burgeoning budgetary allocations, focusing on a self-reliant (Atmanirbhar Bharat), infrastructure, digital transformation, green energy, and social welfare. The shift from subsidies to Direct Benefit Transfers (DBT) and technology-driven governance has been a transformative policy move aimed at enhancing efficiency, reducing leakages, and ensuring targeted welfare delivery.
