Union Budget 2024-25: A very positive move from the market perspective
Banks will have enough space to provide funds to corporates and other sectors
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The focus on MSME, Mudra Yojana, women-led SHG, urban housing, education loan for higher education, agriculture and allied activities getting higher allocation, start-up ecosystem getting further boost augur well for the banking industry
The Budget 2024-25 provides a positive outlook given that the fiscal deficit has been restricted to 4.9 per cent as against 5.1 per cent in the interim budget. The fiscal consolidation road map of 4.5 per cent of GDP by 2025-26 has been reiterated and even thereafter the endeavour of the government to continuously borrow lesser from the market has been indicated.
This is a very positive move from the market perspective and banks will have enough space to provide funds to corporates and other sectors for their credit requirement.
The government’s focus on capex-led growth has been maintained at an allocation of Rs. 11 lakh crore, which is 3.4 per cent of the GDP. This is bound to continue to provide stimulus to economic growth. States have been provided Rs. 1.5 lakh crore of long-term interest-free loans for facilitating similar capex at the state-level.
The focus on MSME, Mudra Yojana, women-led SHG, urban housing, education loan for higher education, agriculture and allied activities getting higher allocation, start-up ecosystem getting further boost augur well for the banking industry.
Falling on expected lines, the budget has focussed on employment and employability, entrepreneurship development, women participation in labour and entrepreneurship, energy-related initiatives, skilling and public private sector participation to improve employability, public digital infrastructure usage to bring improvement and simplification which are all positive features for the banking sector.
(The writer is a former CMD of Indian Overseas Bank)
