00. Budget Overview

Global scenario

Global economy is uncertain due to tariffs, piracy, wars etc. So there is lot of uncertainity in global stage

1. Global FDI

2. US FDI

1. Globally FDI declined because of the uncertainity

2. in US FDI increased because of the AI related growth

How are Bond yields affecting due to global uncertainities and wars

The borrowings are increasing due to wars so to borrow more the interest rate should be more than past bonds hence more bond yield than past

Strategic indispensibility and India (told in budget)

India said that during these times of uncertainity India should become important part of supply chain like china so that we become indispensible in every country's value chain

Lets see India's Internal status

1. Demand side - C,I,G,X

2. Supply side - Agri, Mfg, Services

3. Economic indicators - Inflation, UE, CAB

1. Consumption

2. Investment and Gvt

3. NX dependence

1. In India it is the dominant factor

2. Indian gvt is increasing capex at 20% of budget but the problem is pvt is not contributing much

3. Due to uncertainity we cannot depend on exports dependence

1. Agri

2. Industry

3. Services

1. Due to great monsoon , great production but the growth of Agri is not coming from crops, its coming from allied sectors

2. Mining has declined a little due to rains etc, lets see mfg separately

3. growing very well but few sectors have not recovered from Covid so some schemes are focused on these

MFG

1. goal

1. goal is 25% GDP

2. it was 17% at time of MII 2.0 but now its 12.5% in nominal terms

1. Inflation

2. UE

3. BoP

1. < 2%, core is high because of precious metals etc

2. Unemployment proportional to 1/ education level

3.

Does grants go to current account or capital account

Capital account

FDI and FPI in India

- gross FDI is hight but net is 0 since many countries are taking out money too

- FPI is negative

- so for the first time in many years our Forex reserves are decreasing and currency depreciating so we see measures related to this also

So gvt trying to increase private spending by decreasing Repo rates and lending rates but its not successful so thats why in our budget we see focus on

Altenate lending mechanism, because maybe the pvt sector doesnt want loans, they want other forms of money raising.

From the last 10 years gvt took many steps to increase supply side by many schemes - GST, Insolvency Bankruptcy code, Corporate tax reduction, PLI, Capex increased but did not see much investment from private because the demand was low so for the last 3 years they tried to spurr the demand side by Tax reduction, gst reduction but even then the supply side not increased because of uncertainities and global tariffs so this year gvt again came to supply side.

Now lets see announcements sector by sector

Scheme ECM - expectd for Prelims