FY24 Union Budget - Prudent fiscal management with focus on macroeconomic stability.

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Feb 02, 2023

QuantEco Research || FY24 Union Budget - Hitting the right notes

Our core views for FY24:

The FY24 Union Budget evokes several emotions, some of which can be categorized as:

  • Reassuring, on account policy continuity with fiscal consolidation (50 bps to 5.9% of GDP) and leveraging of public capex as the central theme (with Capex/GDP ratio at a 2-decade high)
  • Relief, as bond investors digest the pleasant surprise in the market borrowing number (of Rs 15.43 trillion vs Rs 16.0 trillion expected), while salaried individuals and pensioners evaluate their benefits from proposed tax relief measures, and key economic stakeholders take comfort from absence of any outright populist announcements ahead of the election season
  • Wow, as tech enabled new age growth drivers (National Data Governance Policy, AI, 5G, etc.) and trust-based governance (Vivad se Vishwas, E-Courts, Entity Digi Locker) find prominence while quality of spending improves to a two decade high

We expect FY24 will take forward prudent fiscal management with focus on macroeconomic stability.