Jaitley hints interim budget could be bigger than a vote on account, pitches for lower interest rate

Finance Minister Arun Jaitley on January 17 said the government could break with convention and make the February 1 exercise more significant than a vote on account.

Jaitley was speaking at CNBC-TV18’s Indian Business Leader Awards.

"The convention has always been that the election year budget normally is an interim budget and ordinarily there should be no reason why we should move away from that convention. But then the larger interest of the economy always dictates what goes into the interim budget and that is something which cannot be discussed or disclosed at this stage," a report quotes Jaitley as saying.

Dismissing fears that he is under pressure to present a populist budget after the recent election debacle in three states and ahead of general elections in April-May, Jaitley said: “The NDA (National Democratic Alliance) government had been in this game for far too long to have nervousness about the budget. We are confident and proud of our performance over the last five years. The NDA government has succeeded in restoring the credibility of the economy and its decision making process over last few years”

However, he did admit that he was concerned about the growth rate. As per the report, Jaitley said the 7-7.5 percent growth rate will not suffice and the eight percent barrier would have to be crossed.

Jaitley refrained from expressing any view on any rate cut despite veteran banker Uday Kotak saying a day earlier that he expects a 50 basis points rate hike by the Reserve Bank of India (RBI) by March 2019. But he did say that India cannot have a real rate of interest that's higher than anywhere else in the world.