From signs of political exigencies to its focus on job creation, many have seen the first budget of the BJP-led NDA government as a message to the Indian voter.
Not everyone is happy. Chief ministers in four states have chosen to skip a NITI Aayog meeting over the “discriminatory” and “dangerous” budget. Opposition MPs are set to protest in Parliament today. And markets which crashed on budget day have opened lower on Wednesday.
The economic survey had underlined the need for stability amid global uncertainties and India’s job-creation challenge. So, as she presented her seventh consecutive budget, Union finance minister Nirmala Sitharaman said “we particularly focus on employment, skilling, MSMEs, and the middle class”.
Here’s what the front pages and editorials of prominent English dailies had to say.
Indian Express
“Election Outcome Budget,” read the banner headline on page one of the Indian Express. The report noted that the budget “was more about coming to terms with the compulsion of coalition politics and calming frayed sentiments over jobs than about big ideas or bold reforms that could shape the five-year course for a government in its third term”.
It also noted that the budget has a “firm grip on fiscal, but first Budget of NDA III silent on reforms”. The front page also acknowledged the “big relief” for startups as the government scrapped the angel tax.
The editorial called it a “holding operation with hands tied”. The paper said the budget does not adequately address the three major problems confronting the Indian economy: Investment, employment and consumption. The focus seems to be more on the Modi government’s efforts to “cement its stability”. It said it’s “not what one would expect from the first budget of a government that claims a historic mandate in its third term”.
“It performs a holding operation instead of presenting a coherent economic framework to deal with these pressing concerns as well as the more long-term structural impediments to growth. Whether the lack of policy boldness or reform impetus in the budget has to do with the BJP being unable to secure a majority in the recent national elections isn’t clear. The budget’s focus seems to be more on the Modi government’s efforts to cement its stability by securing the support of key allies, especially the JD(U) in Bihar and TDP in Andhra Pradesh.”
At the same time, it noted some “specific positives”, such as steps for fiscal consolidation, commitment to macroeconomic stability, and the proposals to abolish the angel tax for all investors in the start-up ecosystem, lowering of the corporate tax rate on foreign companies from 40 to 35 per cent, and further incentivising of the shift to the new income tax regime sans exemptions.
Hindustan Times
The page one headline was “Coalition Economix”. The news daily noted that the budget has “big push for jobs, changes in direct and capital gains taxes key takeaways from budget, which keeps allies happy with schemes for Andhra and Bihar while staying on the fiscal glide path”.
The page one package also carried snippets on “small reactors in energy mix, government cuts fiscal deficit target, focus on climate resilient crops, multi-layered MSME package”. A report also noted that there are “five major schemes to put young India to work” as the government has announced job-creation plans worth Rs 2 lakh crore.
The editorial, meanwhile, said the government has heeded the electoral lesson on the need for jobs and is not a populist budget despite three upcoming assembly elections this year.
“The big theme of Budget 2024 is jobs, or employment. Mrs Sitharaman announced a bouquet of five schemes, with an aggregate spend of around ₹2 lakh crore, aimed at incentivising companies to create jobs, and at training young people to be ready for jobs (including an apprenticeship programme that can expose young people to the biggest and the best companies in the country). Irrespective of data, it was clear that India was not creating as many jobs as it needed, nor providing young people with the required skills to be employable, and this is perhaps the first budget to attempt to solve both problems, and in scale. Much (as it always does) will depend on the implementation, but this is, on paper, exactly the kind of intervention the most populous country in the world (and also the one with the largest working- class population, a distinction India will hold till 2049) needs.”
It noted the response to political exigencies in Andhra and Bihar, and also a move towards simplification of the tax framework. “The economics of the budget show that the government has, in reality, not moved away from its established template.”
“The budgeted fiscal deficit, at 4.9% (lower than the 5.1% mentioned in the interim budget) is a sign of fiscal prudence and macroeconomic stability that has become characteristic of the Indian economy under this government. Continuity is good, as long as the jobs get created.”
The Times of India
The front page main headline was “Race on, FM revs up for poll position” with an illustration of Sitharaman in a racing car. The main report said “formula one: Focus now on getting jobs done”, and that the effect of the Lok Sabha election was “writ large” on the budget.
It said: “The fact that the Budget comes at a time when the govt’s finances are relatively comfortable, meant that it could afford to address these concerns with targeted scheme while keeping the fiscal target under a tight leash”.
A report on the changes in taxation was titled “Change of track to bring some cheer, but cost others dear”. It said that “sweeping changes” in direct taxes gave the urban middle class some cheer, but also hit the wallets of others. “Changes in the taxation of capital gains, on the other hand, could cost the middle class.”
The paper’s editorial said June 4 had changed July 23. It noted that budget-making changes with politics, “but can employer incentives create enough jobs?”
“The budget is the first clear proof that BJP has understood the election message. Not only are its numbers down in LS, there are assembly elections coming up in three states, where, too, the party has vulnerabilities. So, while investment in infra and welfare benefits were the cornerstone of its economic policy in its first two terms, this budget has seen a new turn. This time, FM’s focus has been on employment and skilling and MSMEs, which are usually labour-intensive. The great discontent is on the jobs and livelihood front, and even if political speeches deny this reality, the budget accepts it front and centre.”
“The real challenge is that private investment in labour-intensive sectors is not picking up. And private investment in industries like autos and machine goods is being guided by increasing levels of automation. So, while the budget identifies the problem, it has probably not identified the best solution.”
“The budget’s political economy becomes clearer when one considers that low-income salaried people get some tax relief but the wealthy, investing classes see a jump in their tax burden. Capital gains taxes are up. Stock markets weren’t thrilled about it. But GOI has clearly decided now’s the time to pay attention to people who, GOI had thought, were happy only with a raft of welfare measures.”
The Hindu
The front page main headline of The Hindu read: “Small servings, many plates”. It came with an illustration of Sitharaman and Modi serving food, with Bihar’s Nitish Kumar and Andhra’s Chandrababu Naidu with plates full. It said, “FM signals shift from previous trickle-down strategy to a package of schemes for jobless youth, MSMEs; announces tax cuts for middle class; tightens fiscal target to 4.9% of the GDP.
Another page one report was titled “Nitish hails Budget as Bihar gets ₹58,900 cr”. “Bihar Chief Minister and Janata Dal (United) chief Nitish Kumar, a key NDA ally, called the announcements a big gift to the State, which was denied the Special Category Status by the Centre on Monday. Opposition Rashtriya Janata Dal (RJD) termed them an eyewash,” the report said.
The editorial said the first budget of the NDA government is a “distinct attempt to tell India’s voters that it has heard the angst-ridden message from the country’s unemployed youth loud and clear”.
“With the BJP having suffered reverses in the general election in the face of a concerted Opposition campaign that spotlighted issues agitating young voters such as a palpable lack of jobs, the minister was keen to redress matters ahead of the slew of state elections later this year. Asserting that the poor, women, youth and farmers were the four ‘castes’ that this government was focused on serving, Ms. Sitharaman stressed that this year’s Budget laid particular emphasis on ‘employment, skilling, MSMEs, and the middle class’.”
It recalled the new budgetary proposals aimed at job-creation and said these schemes will need to be weighed against the backdrop of the fact that “India needs to, on average, generate 78.5 lakh non-farm jobs annually until 2030, as the Chief Economic Adviser highlighted in his Economic Survey, largely to absorb the workforce exiting agriculture”.
It said MSMEs “may wait to see the outcome of yet another Budget assurance by the Minister — that the government will work to further simplify the GST regime and rationalise the tax structure — before cheering, given the difficulties they encounter with the indirect tax system”.
Telegraph
The front page lead was headlined “Burden of job thrust on firms”. It noted that “Finance minister Nirmala Sitharaman on Tuesday unveiled plans to spend ₹2 lakh crore over the next five years to create jobs for 4.1 crore youths as the Narendra Modi government tried to blunt criticism from the Opposition for failing to generate employment in the world’s fastest-growing economy.”
The package pointed out that there is “no major tax break, amid dismay on old regime”, while gold, imported phones, and medical devices are cheaper. Another report noted “rain of sops for Bihar and Andhra”.
Meanwhile, the paper’s editorial called the budget “unexceptional”.
“The Union budget for 2024-25 does not contain any surprises that might have a marked positive impact on the nation’s economic performance. The expected political quid pro quo came in the form of special packages for Andhra Pradesh and Bihar. This may set an uncomfortable precedence with such gifting of resources becoming a normal part of budgetary negotiations. On the expenditure side, a number of new schemes have been spread thin over numerous sectors where interventions are required. These schemes and the allocations made for them are all summed up to benefit the poor and the disadvantaged. Such proposals usually come by the dozen in any budget — they usually carry the ‘Pradhan Mantri Yojana’ tag. Some benefits do trickle down to a select group of beneficiaries but they seldom have a momentum that boosts income and employment in any sustained manner.”
It said the two biggest problems facing the economy have been the lack of employment opportunities and inflation fuelled by food prices. “On the latter, the budget announces steps to increase natural farming but does not clarify how these would have any immediate impact on inadequate food production. Several measures have been announced with much flourish regarding the crucial issue of employment. However, the plan seems to be to put the onus of job creation on the private sector and on employers in general.”
Business Standard
“Political but prudent”, read the main headline on the front page, with a picture of Sitharaman.
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Among highlights it noted the three new employment schemes, the internship programme, the end of angel tax, relief for salaried class, and hike in capital gains tax.
Meanwhile, the paper’s editorial noted that Sitharaman “chose not to emphasise the political context within which her ministry had to work”.
“The government of Prime Minister Narendra Modi, which now has a third term, has more constraints than it had previously. The reproof it received from some of its core voters meant it had to take employment and inequality seriously. And its new dependence on state-based parties, particularly the Janata Dal (United) of Bihar and the Telugu Desam Party of Andhra Pradesh, meant it was susceptible to demands.”
It said the budget was taxed and spent smartly but more clarity was needed on the fiscal path.
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