Make it more transparent

The Budget shouldn't ignore provisional figures for 2023-24 and use the extra RBI surplus to better effect

- A K BHATTACHARYA

Now that Nirmala Sitharaman has returned to the ministerial portfolio she held for the last five years, the Union finance ministry has got down to its most important task-preparing the Budget for 2024-25. An Interim Budget was presented by her on February 1 earlier this year, but that was only a vote-on-account, seeking Parliament's approval for incurring a specified amount of expenditure till such time as the full year's Budget is presented by a new government and approved by Parliament. Unlike a few of the previous Interim Budgets, Ms Sitharaman refrained from making any policy announcement or taxation changes, honouring convention and staying on the path of correctness. Now, as she gets ready to prepare the full Budget for the current year, what should be her key concerns?

Undoubtedly, the macroeconomic circumstances under which the forthcoming Budget will be prepared are looking healthier than what prevailed when the Interim Budget was presented. Retail inflation is under control, even though it is still above the government-mandated target of 4 per cent. Gross domestic product or GDP grew by 8.2 per cent in 2023-24 and is expected to grow by 7.2 per cent in the current year. Foreign exchange reserves are comfortable at over $640 billion. The current account deficit was well under control at 1.2 per cent of GDP in the first three quarters of 2023-24 and may even be lower than 1 per cent for the full year, according to some estimates. There are, however, worries on the exports front, with merchandise goods exports falling marginally last year and service exports losing their earlier momentum. With geopolitical tensions showing no signs of subsiding, international commodity prices, particularly those of crude oil, could be another cause for concern. But, overall, the Budget for 2024-25 can benefit from reasonably sound fundamentals of the Indian economy.