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Wednesday, November 29, 2023

How the Union Budget 2023 aims to fortify India against global recession

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The Union Budget ideas for 2023-24 have the ability to propel India’s economic development and increase its investment appeal. These ideas indicate the government’s commitment to carrying on the changes that began almost eight years ago.

The Union Budget ideas for 2023-24 have the ability to propel India’s economic development and increase its investment appeal.

Yet, it must be remembered that the global recession remains a major issue that might have an influence on the global economy and supply chain.

Additionally, the substantial upheavals in the cryptocurrency and stock markets in 2022 cannot be ignored.

As has been witnessed in the last year, markets are likely to be sensitive to these occurrences, which may result in short-term volatility and a fall in investor mood.

Despite this, India’s latest Union Budget illustrates the country’s strength and stability, positioning the country as a leader among growing economies in terms of prospects and economic potential.

India’s place in the global doomsday scenario

The Union Budget plans underscore the government’s goal to mobilise funds for the creation of ‘sustainable cities’. The announcements emphasise green and clean urban growth, good governance, and a transparent financial system. The government has also expanded infrastructure expenditure and offered agricultural incentives. The crucial policy rate hikes in 2022 and 2023 indicate that the RBI is regaining control of reserves and slowing money flow. India has expanded its oil exports from encircled Russia, thus improving bilateral commercial relations.

The country’s food production has remained constant, with a surplus for exports. These incentives and policies will only serve to improve India’s business environment for enterprises and investors.

What is in store for us?

According to preliminary official predictions, India’s GDP would stay between 6 and 6.9 percent in fiscal year 2023-24.

The World Bank has also raised its previous forecast for this fiscal year from 6.5 percent to 6.9 percent.

The main worries are the Ukrainian conflict and the restoration of pandemic-related restrictions in several nations, including China and the United States.

Nonetheless, India’s massive vaccination programme, which has already reached 70% of the population, is a source of comfort.

As a result, in the case of another round of supply chain interruptions, India’s long-planned new trade partnerships and route development will come in handy.

What should be done?

Given the global crisis, the country must be prepared for slower economic growth than previously projected. While developing fiscal and monetary policies, the government should account for a changing circumstance.

With inflation expected to be a concern throughout 2023, the nation will need to come up with new strategies to keep food costs under control.

The proposed budget is a step in the right direction. The country is far more resilient as a result of solid leadership and thorough economic planning with a hands-on attitude by the RBI and economic stakeholders during the previous several years and the epidemic.

The recession that is projected to occur as a result of weakening economies in the United States and Europe may not be as severe as the one that occurred in 2008-09.

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