Finance Minister Nirmala Sitharaman unveiled the interim budget for the fiscal year 2024–25, setting the stage for what is poised to be a significant political and economic juncture for India ahead of the highly anticipated 2024 Lok Sabha elections.
Starting her speech with a poll bugle, she said that she is hoping for a "resounding mandate" from the people based on the "stupendous work" done by the ruling BJP.
This marks Sitharaman's sixth budget presentation, and the echoes of her predecessor's unconventional approach in the 2019 interim budget were not lost as she took the podium. The interim budget, a precursor to the upcoming elections, has traditionally been a platform for strategic announcements, and Sitharaman's address adhered to this precedent with a careful balancing act.
In the lead-up to the elections, Sitharaman's budgetary decisions will not only shape the economic trajectory but will also play a decisive role in influencing voter sentiments.
Amid Indian economy’s expansion, the government finds itself in a favourable position, reaping the rewards of a tax windfall that aligns with its deficit-curbing objectives.
This paved the way for Nirmala Sitharaman to steer a course that ensures the continuity of infrastructure spending while strategically addressing the priority sectors outlined by Prime Minister Narendra Modi for the upcoming elections – farmers, women, the poor, and the youth.
Sitharaman outlined the existing programmes for the four sectors in her speech. She also spoke about R Praggnanandhaa and other sportspersons, stating their achievements last year.
In her hour-long speech, sprinkled with government flagship programmes and slogans, Sitharaman said she hopes that India can become "Viksit Bharat" by 2047. The second term the BJP government strengthened the party vision of "Sabka Saath, Sabka Vikas and Sabka Vishwas", she added.
"Next 5 years will be years of unprecedented development to realise the goal of becoming a developed country by 2047," she said to sounding applause.
She also spoke about a "new world order" that came after the Covid pandemic. She listed the crises brought upon by the disease - food, fertiliser, fuel and finances - and asserted that India navigated them well.
With the unexpected surplus, Sitharaman’s policies can not only sustain the momentum of infrastructure development but also deliver targeted support to key demographics crucial for Modi's electoral aspirations.
The 2019 interim budget, presented by acting finance minister Piyush Goyal, catered to rural development, offered incentives for the middle-class, extended support to the real estate and MSME sectors, all while maintaining a fiscally balanced approach with a fiscal deficit target of 3.4 per cent for FY19.
This term, the government aims to reduce the fiscal deficit below 4.5 per cent by 2025-26. The fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP.
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Taking cues from past budgets, including Goyal's departure from convention in 2019, Sitharaman's address was closely watched for any significant announcements.
Drawing parallels with the 2019 interim budget, where Goyal announced concessions in direct taxes, Sitharaman kept income tax slabs unchanged. In historical context, governments approaching elections have generally refrained from major income tax changes and the finance ministry has already hinted that there will no big announcements.
She quoted Prime Minister Narendra Modi's speeches thrice in her speech, mentioned the recent Ram Mandir pran prathistha ceremony in Ayodhya, indicating the prepping of the political landscape ahead of polls.
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