As India prepares for the Union Budget 2025, corporate confidence is on the rise, buoyed by recent positive economic indicators. Ajay Shriram, Chairman and Senior Managing Director of DCM Shriram, has expressed strong optimism, citing robust industrial output data and an anticipated government focus on reforms and employment generation as key drivers.
Strong IIP Performance Fuels Budget Optimism
The foundation for this positive outlook is the latest Index of Industrial Production (IIP) data. Industrial output surged by 5.9% in November 2023, marking a significant acceleration from the 4.2% growth recorded in the same month the previous year. This robust performance, particularly in the manufacturing and mining sectors, signals a resilient and expanding industrial base.
Ajay Shriram highlighted this data as a critical factor shaping expectations for the upcoming budget. He noted that such strong numbers provide the government with a solid foundation to continue its reform agenda without the pressure of needing immediate stimulus measures. The sentiment is that the economy is on a stable growth path, allowing for strategic, long-term policy planning.
Key Expectations: Reforms, Jobs, and Continuity
While the February 2024 budget was an interim one, the full Union Budget for 2025-26 is expected to build upon its foundation with a clear, growth-oriented vision. According to Shriram, the primary expectations from the business community revolve around three core areas.
First, there is a strong anticipation for continued structural reforms. Industry leaders are looking for policies that further ease doing business, simplify regulatory frameworks, and incentivize private investment, especially in manufacturing under initiatives like the Production Linked Incentive (PLI) schemes.
Second, job creation remains a paramount concern. The budget is expected to introduce measures that boost employment, particularly in labor-intensive sectors. This could involve enhanced support for micro, small, and medium enterprises (MSMEs), which are the largest employment generators, and skill development programs aligned with industry needs.
Third, there is an expectation of policy continuity and fiscal prudence. The market expects the government to maintain its path of fiscal consolidation while strategically increasing capital expenditure on infrastructure. This balanced approach is seen as essential for sustaining growth without stoking inflation.
Interim Budget as a Stepping Stone
The interim budget presented in February 2024 set the tone by emphasizing fiscal discipline, increased infrastructure spending, and support for key sectors like agriculture and green energy. It refrained from major populist announcements, focusing instead on continuity.
Ajay Shriram's comments suggest that the industry views this interim budget favorably, as it provided stability. The expectation for the full budget is that it will translate this stability into a more detailed and actionable roadmap, addressing specific growth bottlenecks and leveraging the current economic momentum.
The confidence expressed by veteran industrialists like Ajay Shriram is a significant indicator of positive business sentiment. It reflects a belief that the government's economic management is on the right track and that the upcoming budget will be a catalyst for the next phase of India's growth story, with a sharp focus on creating jobs and enhancing competitiveness on the global stage.
