Union Budget: A Simple Vote-On-Account In An Election Year
The India Commentary view
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By Our Editorial Team
First publised on 2024-02-02 02:53:39
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The India Commentary view
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Finance Minister Nirmala Sitharaman presented the interim budget in Parliament yesterday. With focus on infrastructure, the budget chose to tick all the right boxes and the finance minister did not resort to any populist measures or tinkering. All direct and indirect tax rates remained the same. Also, neither were new welfare schemes announced nor old handouts increased. That reflects the government's confidence in an election year that its existing welfare schemes are working well for the labharthis and there was no need to strain the finances by going overboard.
This confidence has allowed the government to be financially prudent. It has been able to contain fiscal deficit to 5.8% and the revised estimate is below the budget target. The finance minister also pledged to bring it down further to 5.1% in FY25. This is welcome. This also means that the government will borrow less which in turn means that more funds will be available for the private sector which has been a laggard when it comes to investment. Since the core sector growth has slowed down, the increased allotment for infrastructure is welcome as it will help in turning the wheels of the economy and have a positive effect on private investment, job creation and downstream units.
The increase in capital expenditure and the hold on subsidies and handouts also shows that the government is more interested in development which always brings long term gains in terms of job opportunities and increased incomes. This is also welcome.
In an election year, the chances of a government resorting to populist measures in a bid to attract voters are always there. That this budget avoids that and goes for fiscal consolidation and development shows that the government is confident of returning to power in the general elections and hence is more interested in long terms gains for the economy.
