CONFIDENCE IN CONTINUITY

No one expected Union finance minister Nirmala Sitharaman to make big-ticket announcements in the interim budget for 2024-25 she presented on February 1, considering the general election is just three months away.

- MG Arun

Sitharaman signalled a continuation of the policy measures of the Narendra Modi government, even as she adhered to the fiscal discipline that has been characteristic of her budgets in the past few years. The FM expects the fiscal deficit (the government’s expenditure over its revenues) in FY25 to be 5.1 per cent of the GDP, in line with the Centre’s aim to bring it below 4.5 per cent by FY26. The fiscal deficit for FY24 (revised estimates) stood at 5.8 per cent. The bigger roadmap for a Viksit Bharat, she said, would be presented in July, exuding confidence that the present regime will be back in power by then.

Sticking to convention, Sitharaman refrained from announcing any big welfare sops or tax cuts. “Development programmes in the last 10 years have targeted each and every household and individual, through housing for all, har ghar jal, electricity for all, cooking gas for all, bank accounts and financial services for all, in record time,” she said. She did announce an 11 per cent increase in capital expenditure, though, which would translate to Rs 11 lakh crore or 3.4 per cent of the GDP. This comes on the back of a threefold rise in capex in the past four years to boost the country’s infrastructure. “In an election year, the budget strikes a balance, prioritising sensibility over populism,” says Trideep Bhattacharya, president & chief investment officer, equities, Edelweiss MF.