BUILD NEW CITIES TO CREATE JOBS, BOOST GROWTH

"We will initiate building 100 new cities; enabled with the latest in technology and infrastructure-adhering to concepts like sustainability, walk to work etc, and focused on specialised domains. BJP election manifesto, 2014

- SHANKKAR AIYAR

BUDGET 2024, to be presented by Finance Minister Nirmala Sitharaman on Tuesday, is effectively a grand challenge on how to spend a bonanza of ₹1 lakh crore. To appreciate, consider the timeline of events and facts. The interim budget of February 2024 defined revenues and allocations to craft the pathway to a Viksit Bharat by 2047. It allocated over ₹11.11 lakh crore for capital expenditure, expanded welfare payments and promised to reduce fiscal deficit to 5.1 percent of GDP. The balancing act triggered hosannas for economic conservatism.

The political and economic landscape has since shifted. On May 22, the RBI approved a transfer of Rs 2,10,874 crore to the government more than double the sum assumed in the budget, creating headroom for a spend of ₹1 lakh crore. This was followed by the June 4 verdict and an altered political reality. It is likely that allocation of the trillion-rupee bonanza is informed and defined by the response to the diminished tally.

This has fuelled a binary narrative on how the bounty of 1 lakh crore (and more from higher tax collections) must be allocated. In the blue corner are folks who argue for a response to the cries of distress from the bottom of the pyramid that influenced the verdict. Those in the red corner advocate a hike in capital expenditure on infrastructure to boost growth and revenues.