On February 1, Nirmala Sitharaman, the Finance Minister of India, will present her sixth budget, an interim one. It will be the last one before the upcoming general elections in April-May. Thereafter, the ruling government will make final adjustments to the Interim Budget in June. In the Union Budget 2024, the government aims to build on the growth momentum of the past two years while maintaining fiscal discipline.

Union Budget 2024-25: List Of Important Metrics

1. Budget Size

The most closely monitored figure ahead of general polls is the Budget size, which underscores the government’s fiscal support for the economy and welfare programs. It serves as a pivotal indicator in shaping public sentiment. This metric reflects the scale of financial commitment and sets the tone for economic priorities.

2. Capital Spending

Owing to its significant multiplier effect, government capital expenditure has stimulated investment-driven growth in the absence of a widespread resurgence in private investment. This strategic approach serves as a crucial tool for the revitalization of the economy. Moreover, prioritizing capital expenditure fosters infrastructure development and creates a ripple effect for overall economic expansion.

3. Nominal GDP Growth

This metric is mainly tracked for the government’s revenue assumptions and tax resilience. A higher growth helps contain the fiscal deficit ratio, which is a key factor influencing economic stability. Furthermore, a strong GDP growth not only boosts government revenue but also strengthens the overall economic foundation.

4. Fiscal Deficit

It reflects the budget’s fiscal surplus or deficit. It is calculated by deducting the government’s total expenses from its total revenue. The result indicates if the government has been able to adhere to its fiscal commitments or not.

5. Disinvestment

This metric signals the government’s privatization goals, contributing to the revenue mop-up. It is particularly relevant given recent setbacks on the strategic sale front. In addition, disinvestment can streamline public sector enterprises, promoting efficiency and adding funds into the government treasury.

6. Market Borrowing

The metric is closely watched for its impact on interest rates and bond yields. In addition, it’s important to note that excessive government borrowing can crowd out private players. Whilst, judicious market borrowing is essential to fund government initiatives without causing disruptions in the broader financial markets and private sector activities.

7. Net Tax Mop-up

It is crucial to assess the government’s spending capacity without worsening the fiscal gap. Moreover, any shortfalls may lead to borrowing or spending cuts. The ability to meet tax targets directly impacts the government’s ability to fund its programs and maintain a balanced budget.

8. RBI Dividend

While not explicitly mentioned in the Union Budget, it forms part of ‘dividends and profits’ and has historically helped narrow the government’s fiscal gap. Though often overlooked, it is an impactful fiscal contributor. Utilizing RBI dividends responsibly can help manage budgetary shortfalls without resorting to excessive borrowing.

The post India’s Union Budget 2024-25: Important Metrics To Look Out For appeared first on CoinGape.

---

Filed under: News - @ January 1, 1970 12:00 am