Realistic expectations from Budget 2023-24

Will the government fall prey to electoral temptations or will it remain focused on growth and fiscal consolidation?

- AJAY DUA

The last full year Union Budget, as well as the State Budgets that preceded the General and Legislative Assembly elections, were understandably populist in character and content. When translated into financial and policy decisions, this meant promising goods and services at below cost, or in some cases totally free. Concessions of various kinds also get extended to the applicable regulatory provisions. Obviously, the expectations of all governments of the day is to convert such “revadis” (as these have come to be called ever since Prime Minister Narendra Modi termed them so a few months ago) into immediate political and voting support. In such a somewhat reciprocal process, the authorities tend to forsake the potential leverage available to them by not using budgetary financial provisions for larger and sustained public welfare that might require a long gestation period before bearing fruits.

When presenting its budget for 2023-24, the million-dollar question now is whether the currently well entrenched NDA government at the Centre would fall prey to these electoral temptations or would it remain focused on growth and fiscal consolidation. A reasonable expectation is that Union Finance Minister Nirmala Sitharaman, now presenting her fifth Budget, would maintain a nuanced approach and aim for a blend of both.

CONSTRAINTS IN BUDGET-MAKING