India's Interim Budget Signals Economic Resilience: SICCI

Singapore, Feb 1 (PTI) The interim Budget announced by Finance Minister Nirmala Sitaraman on Thursday is an indication that the Indian government is striving for consistent economic growth despite geopolitical uncertainties, the Singapore Indian Chamber of Commerce and Industry said.

The announcements in the interim Budget will continue to support the initiatives launched for Indian citizens and further boost bilateral economic ties on a government-to-government basis, SICCI Chairman Neil Parekh noted.

The budget lists several initiatives to deepen economic cooperation and explore joint opportunities with the finance minister detailing various business opportunities between Singaporean and Indian companies.

A recent one is the Indian government's decision to expand the electric vehicle ecosystem, an area in which Singapore is keen to work closely with regional governments and share expertise, Parekh said.

In the tourism sector, the Indian government has announced interest-free loans for states to promote tourism, he observed.

These initiatives were actively discussed between SICCI and several Indian state delegations during the two recent Global Investment Summits held at Chennai and Ahmedabad in January 2024.

A significant push has also been announced to train almost 1.4 crore Indian youths to make them job-ready under the Skills India mission, the SICCI chief noted.

“SICCI will be pleased to facilitate linkups with educational institutes for India's young people to immerse themselves in Singapore's skills upgrading programmes,” he said.

Parekh assured, “We in the Singapore Indian Chamber of Commerce and Industry would be delighted to collaborate and play a role in India's success story as we commemorate our Centenary in 2024.”

The business community in Singapore also said the interim budget "prioritising pragmatism over populism" and emphasising a sustainable budget for a developing India is sure to hit the bull's-eye.

“The idea of launching new programmes to develop the strength of our technologies is the need of the hour and I think Nirmala Sitharaman's budget captures this aspect very well,” said Atul Temurnikar, co-founder and chairman of the Singapore-based Global Schools Foundation.

There is also a concerted effort to allocate more funds to the education sector which is a welcome sign, he said.

Presenting a vote on account for 2024-25 in Parliament, Finance Minister Sitharaman proposed no changes in income tax rates for individuals and corporations, as well as customs duty.

She hiked capital expenditure to Rs 11.11 lakh crore for 2024-25 while trimming the fiscal deficit for this financial year to 5.8 per cent, from the budgeted 5.9 per cent of GDP, and further lowering it to 5.1 per cent in the next fiscal.

“All in all, Prime Minister Narendra Modi government's emphasis on a sustainable budget for a developing India is sure to hit the bull's-eye,” he told PTI.

Separately, Radhika Rao, Senior Economist, DBS Bank, sees the budget as "prioritising pragmatism over populism" by focusing on higher capEx disbursements and faster fiscal consolidation.

The math not only projected a better-than-budgeted deficit target for the current year FY24 (year ending March 2024) but also pegged the FY25 goalpost at a narrower -5.1% of GDP (vs expectations of -5.3-5.4%), she noted.

By extension, gross and net borrowings are much lower than FY24 providing significant relief to the domestic debt markets, which will help keep a lid on the cost of borrowing and crowd-in the private sector, believes Rao.

“Despite the welfare focus on women, youth, poor as well as the farming community, the government refrained from outright populism, whilst maintaining a continued emphasis on capEx to improve the quality of spending,” she said.