Neelkanth Mishra, Chief Economist at Axis Bank and Global Research Head at Axis Capital,
has remarked that Budget 2024 is expected to create short-term challenges for India’s
economic growth. Speaking to ‘Business Today TV’, Mishra noted that the fiscal
consolidation measures outlined in the budget are designed to temporarily slow growth.
“In the near term, the budget acts as a headwind to growth because fiscal consolidation
requires reducing government support. However, this approach is prudent and
well-calibrated. As the economy gains the ability to sustain itself independently, the
government can step back,” Mishra explained.
He emphasized that while the immediate impact might appear restrictive, the budget is
significantly beneficial for medium-term growth. By prioritizing macroeconomic stability, the
government signals its commitment to maintaining a predictable economic environment.
“This strategy improves visibility for key economic indicators like interest rates, inflation,
and the overall cost of capital, encouraging businesses to invest. Additionally, being the first
budget of the new government, it sets the tone for policy priorities over the next five years,”
Mishra added.
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