GOVT MAY EXPAND PMJDY, RAISE CAPEX OUTLAY BY 16.5% IN FY25

When Finance Minister signalled the final stage of preparations for the Interim Union Budget 2024 with the commencement of the Halwa Ceremony on 24 January that heralds the start of Budget document printing, it was much more than the symbolic practice which every year acts as an integral prelude to the most awaited financial event of the year.

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The traditional ‘Halwa Ceremony’, this year, attended as always by the Finance Minister and other officials of the ministry involved in the Budget-making process inside the North Block, was the last one in an eventful 10 years of presentation of a visionary and ambitious document that has charted India’s rise to the sweet spot of the world’s fifth largest economy.

Building on this edifice towards a more ambitious growth and development trajectory and amidst the countdown to the general elections, the Interim Union Budget 2024 --though technically a vote-on-account to be presented on 1 February, 2024 -- has stirred immense expectations and anticipation among policymakers, economists, industry, businesses, investors and market watchers on the roadmap that the Government is likely to roll out as it looks at transforming into the third largest economic power by 2030. A vote on account is a special constitutional provision by which the Government gets Parliament’s vote to secure funds for essential expenditures for part of the next financial year and outlines the contours of its fiscal strategy if it is voted back into power, without announcing new spending or revenue commitments.

However, there are two reasons why the interim budget is important. First, the government is in election mode and so there will be tacit targeting of its key constituents and second, with most opinion polls predicting the current government will be back in power, it is likely that the interim budget will be presented factoring in the assumption of policy continuity after the elections.