Sitharaman’s budget has some hits but a few misses too

livemint.com:

₹16.13 trillion (4.9 % of GDP), is lower than the 5.1 % of GDP targeted in the interim budget. The latest GDP estimate for 2024-25 of ₹326.37 trillion is close to that used in the interim budget. Even so, the absolute reduction in the FD budgeted, by ₹72,000 crore, is more informative than in terms of percentages of GDP.

Will this exemplary display of fiscal rectitude fend off the warning from Moody’s Ratings that poor water management in major cities might affect the country’s credit rating? The final budget does have a provision for improving water supply and sanitation in 100 large cities through “bankable projects" funded by multilateral banks (MDBs), but this does not begin to address the urgency and severity of the problem. MDBs take their time even to formulate a project report, as the World Bank’s President Ajay Banga readily confessed at the Morocco meetings last year. Climate action seems to have been largely waved away to the Economic Survey (dealt with further below).

There are special provisions for Bihar and Andhra Pradesh. In the current fiscal year, Andhra will get support of ₹15,000 crore to fulfil promises made at the time of state re-organisation in 2014, with “additional amounts in future years." Funding for the large Polavaram irrigation project is also promised, but does not seem to have been provided for in the current year. Bihar gets a special share of funds for flood control ( ₹11,500 crore), road and bridge connectivity ( ₹26,000 crore), mega power projects ( ₹21,400 crore) and tourist development of religious centres, but only a part of these might impinge on the current fiscal year.