Interim Budget 2024 Review - Exhilarant Growth Claims Of Budget-25 Mask The Fiscal-Monetary Drags: Systematix

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Interim budget pivoted on growth optimism The interim budget is pivoted on the assumption of a robust economy, in line with the latest advance estimates of CSO and the government's rosy assessment in their latest monthly assessment. The Finance Minister Nirmala Sitharaman claims rising incomes, historical upliftment of people from poverty, private capex revival, and robust employment generation. The nominal GDP is projected to grow by 10.5% in FY25BE (7% real and 3.5% inflation) versus 8.9% in FY24AE..Concomitant fiscal drag and RBI’s tightening would require a gigantic counterbalanceThe fiscal structure of the interim budget FY25 will be a drag on the already weak aggregate demand for the economy. This comes against the backdrop of declining global trade volumes, a major post-pandemic thrust for India’s recovery. This makes the role of private capex and household consumption spending very crucial for India’s outlook. The real gross domestic product data for H1 FY24 shows that, excluding the discrepancies, total expenditure across households, governments, and net exports grew by just 2.3% YoY (versus headline growth of 7.7%), despite the heavy lifting by government capex (~50% YoY in real terms). With an average capital formation growth of 9.5%, the implied residual of private capex would have still declined, contrary to the budget assumptions..We have also shown that after extracting the leveraged part, the overall household consumption is estimated to have grown by 115% YoY in H1 FY24 in real terms, from the overall private final consumption expenditure growth of 4.5% in H1 FY24, the real non-leverage portion may have declined by 2.5% YoY, indicating a decline in real household income as well. The evidence is also reflected in the contraction in sales growth of non-finance companies (-1.5% in H1 FY24) and consumer companies continuing to deliver weak volume numbers in Q3 FY24.Click on the attachment to read the full report:.Interim Budget 2024-25 Review - Continuity Of Policies: Prabhudas Lilladher.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Interim Budget 2024 Review - Exhilarant Growth Claims Of Budget-25 Mask The Fiscal-Monetary Drags: Systematix

Concomitant fiscal drag and RBI’s tightening would require a gigantic counterbalance

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