Finance Minister Nirmala Sitharaman on Thursday presented the interim budget 2024 on Thursday. In a bold decision, the government remained steadfast on the fiscal course-correction trajectory in the interim budget, opting against populist spending or incentives in anticipation of the upcoming summer general election.
The announcements made by the Finance Minister also shows that the government is worried that any measures to stimulate consumption could worsen inflationary pressures and undermine efforts to control prices.
Sitharaman refrains from announcing freebies, rebates
However, refraining from succumbing to the temptation of providing freebies, welfare schemes and discounts to secure votes indicates the BJP's confidence in their prospects for victory in the upcoming general elections slated for May this year.
FM Sitharaman had earlier made clear that the interim budget will be presented just to meet expenditure until a new government is sworn in after elections. "No spectacular announcements are made" in a vote on account, she had said.
In her today's speech, Sitharaman said, "In the full budget in July, our Government will present a detailed roadmap for our pursuit of Viksit Bharat."
Typically, governments use their interim budgets to make extravagant promises in an attempt to attract voters before major elections. However, Sitharaman and the government's approach in the interim budget, coupled with the assertion that a full budget of their government will be presented in July this year, suggests their confidence in securing victory in the 2024 Lok Sabha elections.
Govt focuses on reducing fiscal deficit
The interim budget predominantly highlighted the government's primary agenda of reducing the fiscal deficit.
The government maintained major subsidies at the current year's level and left income tax slabs unchanged. Extending the free foodgrain program for the next five years is expected to result in minimal additional spending, given the established presence of a subsidised foodgrain initiative. Despite opposition concerns about high youth unemployment, the government has prioritised infrastructure spending, offering incentives to attract both foreign and domestic manufacturers with the aim of stimulating economic growth and, ultimately, job creation. The decision to reduce the fiscal deficit in an election year indicates that the government has not heavily depended on social spending to garner voter support.
Modi, BJP confident of 2024 win
This specifically indicates PM Modi and his party's assessment of their popularity among the masses, particularly following the inauguration of the Ram temple. Riding the saffron wave, and with the opposition in disarray, the BJP, under PM Modi's leadership, appears confident of securing a comprehensive victory in the Lok Sabha polls, even without announcing any remarkable social spending schemes or tax cuts.
With the recent assembly elections demonstrating the BJP's dominance in the Hindi heartland, the inauguration of the Ram Mandir in Uttar Pradesh, and influential leaders like Nitish Kumar rejoining the alliance, the saffron party finds itself in a position to comfortably surpass the 272-mark. Consequently, the party has refrained from making extravagant efforts to woo voters in the Interim Budget 2024.
