As the BJP government presents an Interim Budget, its second in a decade, The Indian Express attempts to decipher the politics of economics in the choice of words the Finance Minister may use in the speech
Interim Budget 2024: In 2023, central bankers worldwide will coordinate efforts to fight inflation. The Modi government may opt for subsidies and tax cuts in the upcoming interim budget to further ease the fight against inflation. The Interim Budget will be closely watched to assess the government s fiscal prudence. The 2024 Union Budget may focus on prudent spending, boosting productivity, and implementing coordinated monetary-fiscal policies. Welfare spending is expected to be a main focus as elections approach, and robust tax collections provide some fiscal flexibility.
The government is expected to stick to fiscal prudence in the interim budget, with a 5-10% increase in budget line item allocations. Confidence should be provided that fiscal deficit targets will be met, with reductions in food and fertilizer subsidies. Positive signaling on fiscal spend, including increased allocation for capex, is anticipated. Divestment targets are likely to be modest in the interim budget but significantly enhanced in the full budget. India s macroeconomic situation for FY 2024-25 is projected to have a GDP growth rate of 6.3-6.5%, with risks stemming from geopolitical factors.