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On July 23, the coalition government led by Indian Prime Minister Narendra Modi will formally submit the first central fiscal budget after the 2024 general election. The new budget will replace the interim budget (2024-2025 fiscal year) launched on April 1 this year and become the first budget during Modi's third term as prime minister.

In June, Modi was sworn in in New Delhi, the capital of India, and began his historic third term as prime minister. According to the Global Times, the Modi government has great economic development ideas, including a large investment in infrastructure construction, digital network development, and clean energy utilization in the past decade. However, the Financial Times reported on the 22nd that although Modi's BJP won the general election in June, it unexpectedly failed to win a majority of seats in parliament alone. Modi had to rely on two key regional small parties to maintain his rule and suppress the resurgent opposition.

The Financial Times mentioned that in the context of elections that were not as good as expected, the Modi government's new budget must meet the requirements of its coalition partners and also put forward an economic vision that strengthens confidence. An analytical article by Bloomberg News stated that the coalition government led by Modi will slightly lower the fiscal deficit target in the 2024 budget and focus the budget on promoting consumer spending and employment in rural areas.

A report by financial services firm Nomura predicts that the Modi government may provide tax incentives for new production facilities and encourage localization of key industries such as defense to create jobs. However, it will take some time for these measures to take effect. Economists at Goldman Sachs Group said that the first budget of Modi's new government may "lean" toward welfare, but will not necessarily give up increasing capital expenditures on large infrastructure projects.

Relevant information shows that in the past three years, the Modi government's spending on long-term infrastructure projects has almost doubled, including the construction of the Mumbai Cross-Sea Bridge and multiple highways. This year, the Modi government plans to invest 11 trillion Indian rupees (about 956.1 billion yuan) in such projects. Economists predict that the new budget will further promote the development of India's domestic manufacturing industry.

However, beneath the seemingly stable macroeconomic environment, employment issues for hundreds of thousands of Indian young people and development difficulties in rural areas still exist.

Relevant information shows that most of India's population lives in rural areas in the north and east, where the per capita income is generally lower than in other areas. According to the BBC, Rathin Roy, a former member of the Prime Minister's Economic Advisory Committee, cited relevant reports saying that the health status, mortality rate and life expectancy of the population in these areas are even lower than some of the least developed countries in Africa.

Uttar Pradesh is India's main agricultural region, with some villages just a few hours away from the capital New Delhi, and advanced highways running through them. However, these places give people a sense of being ignored by the economic boom narrative. Rajneesh Tyagi, a furniture store owner in the local village of Behra Asa, told the BBC that their furniture workshops have been affected by the continued economic downturn in the countryside, and the total turnover has dropped by 80% in the past five years. "The agricultural economy continues to decline. The biggest problem for local demand growth is that farmers are deeply in debt and unemployed. They can't afford to buy anything," said Tyagi.

Another farmer also comes from this village. Sushil Pal, a member of the farmer's family, said in an interview that Modi once promised to double agricultural income, but failed to do so. He voted for the BJP in the first two general elections, but changed his voting preference in the 2024 general election. "My income has fallen. Input and labor costs have risen, but the prices of my crops have not risen. They (the government) only slightly increased the purchase price of sugarcane before the election. All the money I earn goes to pay for my sons' tuition and university fees. One of my sons is an engineer, but he has not worked for two years." Pal said.

According to the BBC, similar to Tyagi's furniture store, India has many micro-enterprises that support India's national economy. According to the credit rating agency India Ratings, 6.3 million businesses closed down between 2015 and 2023, with a loss of 16 million informal jobs. In contrast, between 2018 and 2023, due to government tax cuts and other measures, the profits reported by 5,000 listed companies in India increased by 187%.

Bloomberg reported that most economists believe that long-term unemployment will be the biggest challenge facing Modi 3.0. A survey after the election showed that 70% of Indians support taxing the super-rich, and 80% of economists believe that the current economic growth in India is not inclusive.

According to Reuters on July 21, Indian government data revealed that between 2014 and 2022, 220 million people in India were seeking to work for the central government, of which only 722,000 were able to "get a job". Many people may apply for public sector jobs repeatedly. Despite the growing share of the private sector in India's national economy, tens of millions of young Indians are still struggling to get a government job every year.

Analysts believe that the new government budget needs to pay more attention to the development of rural areas, because most of the rural population has not benefited from the rapid growth of GDP. In a recent public speech, Ratin Roy said that Modi may be more focused on leaving "a lasting political legacy" in his third term and think more about how to improve the economic level of the grassroots people.