Interim Budget: What Is In Store?
The India Commentary view
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By Our Editorial Team
First publised on 2024-01-31 06:28:35
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The India Commentary view
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The interim budget will be presented on February 1. This being election year, the vote-on-account will seek Parliament's approval to distribute funds in existing schemes and approve departmental budgets so that the government can run smoothly. No new schemes can be announced. With the Economic Survey not placed before the nation before an interim budget (it will come out in July), the report of the finance ministry, which said that the economy is likely to grow at 7% next year and that India can be a $7 trillion economy by 2030 if geopolitical situation remains stable is an indication that the government is happy with the way the economy is performing.
But some concerns remain. Inflation, especially food inflation, is not tamed despite supply-side interventions by the government. Demand has not picked up as it should have given that the government has invested massively in infrastructure projects. The recovery in the economy is uneven as some sectors are underperforming. The level of stress in the financial sector is evident as the RBI has warned banks about delinquency and default in personal loans and credit card dues. With high unemployment, job losses and reduction in salaries, disposable incomes have gone down. Although the government has painted a rosy picture about the uptick in private investment, the ground reality is different. Projects are being postponed and even shelved in several sectors due to the uneven recovery. Hence, the interim budget must keep in mind that although the economy is on strong ground, it needs interventions to make growth even and reduce stress in the financial sector.
