A Peek In To The Interim Budget 2024
The fourth paperless budget is to be presented by the Finance Minister Nirmala Sitharaman on the first of February. This would also mark the sixth budget of the Finance Minister. The coming budget, being the final before the elections, could bring in people pleasing measures to the fore. Possibly, Prime Minister Narendra Modi would usher in new measures for spending.
There has been a quick expansion of the economy in the last few years, leading to a tax windfall, enabling the government in deficit constriction. Though not a mega spending extravaganza, this tax windfall, could reflect in the expected budget speech, as the scenario could support the government in keeping its spending on infrastructure going on and could also side the government in supporting its priority sectors, mainly, women, agriculture, youth and the deprived. The interim budget may not hold any huge announcements, as the Fin Min has hinted.
On the fiscal deficit front, the government has been gradually calming it down since the Covid times, as it had touched 9.2 percent of the gross domestic product during that period. The target for the coming March is 5.9 percent which would most likely be met and further, the deficit target could be lower than this. The deficit target has been improving as a result of the increasing tax receipts. Income tax, corporate tax and GST has inched higher by 30, 20 and 10 percent. The plan target for the deficit overtime is 4.5 percent; though at the same time, the government has infrastructure spending and subsidy curbing, it looks well for the growth of the economy, reported the HT as per the HSBC Holdings Plc. The Bloomberg survey reports that though borrowing could stay at, close to 15 trillion rupees this coming year, it may not turn a worry for the bond market as the demand overseas could go up when India becomes a part of the global bond indexes, says the HT.
As for capital expenditure, in the last few years, it has been winding, with the priority being given for roads, power plants and ports. This has been reinforcing growth as per official records with more than seven percent, fielding India as an economy which is a fast-growing major economy. The leap of the infrastructure spending could lower down, though at the same time, it could see a level of nine to ten percent, which is an elevated level says the HT.
The year gone by has seen measures to curb rising food prices, normally, it is expected by the government to render more financial support to the farmers, after ban of rice, wheat and sugar exports which have lowered the farmers income, along with poor rainfall. Spending on welfare is expected to go up with popular measures setting in. The subsidies on cooking gas and fertilisers have already been increased by the government along with a free food programme for five years for 800 million people at $142 billion; more could come in the bracket of housing, farmer income and health insurance expansion. In social spending, keeping apart subsidies, it could go up by eight percent in the coming year, says analysts of Jefferies India Ltd., reports the HT. reports also says that social security funds could set in for the informal sector, also for people with gig jobs.
Women were never left without appreciation; the government has already given cooking gas subsidies and loans at cheaper cost to women. At QuantEco, the economists are of the view that the plan of free gas to women, may see a “higher outlay” with the government planning to extend it to more beneficiaries, to 7.5 million in the coming three years, said the HT. The budget could hold more for women voters as they hold a prominent part in the elections which are due. Primarily, the views from economists are that, the budget could focus on priorities and fiscal consolidation measures, especially as the Prime Minister is considered to be in a position to stay on, the pressure for populist measures could be less. The budget could be a continuity from the last one.
