Interim Budget: lots of investment, and self-appreciation

It is a platform for taking credit for successes and blaming the Opposition for failures

Interim Budget: Lots of Investment and Self-Appreciation

T K Arun

The interim budget is presented, technically, to enable a vote on account to authorize expenditure to keep the government functioning, as new taxes have to await the full budget to be presented by the new government sworn in after the proximate general elections. However, it serves as a platform to highlight the achievements of the outgoing government and present a vision of the glories it hopes to achieve in its next term. Nirmala Sitharaman did not disappoint on either count.

The Interim Budget retains all existing direct and indirect tax rates, and proposes changes only to the extent of extending by one year certain vital tax benefits due to expire by the end of the financial year. The size of GDP in the 2023-24 financial year has been 2% lower than anticipated in the Budget for the current year. Yet, revenue growth has exceeded the target. The fiscal deficit has been contained at 5.8% of GDP, below the target of 5.9%. The target for the next year is meaningless in an interim budget, but by pegging it at 5.1% of GDP, the government has indicated its intention to stick to the goal of dipping below 4.5% of GDP for this vital indicator of fiscal prudence. These are commendable moves.

The Budget Speech celebrates the achievement of the government over the past 10 years, listing out the advances made by the economy in sector after sector and by enumerating the number of schemes launched by the Centre and funded by the Centre, and, therefore, named after the Prime Minister, the office, rather than the individual. The PM has a benevolent eye and munificent purse for women, youth, farmers, scientists, villagers, towndwellers, commuters, freight operators, exporters, importers, small industrialists, large industrialists, startup, entrepreneurs outside the startup ecosystem, the unskilled, those studying, those seeking work, the homeless, scientists, researchers, the greenminded, the more urgently energy-focused, the birds and the bees. The speech did not omit to mention a major election plank of the government, the Ram temple at Ayodhya, by bringing up his promise to install rooftop solar panels on 10 million homes, to give them free electiricity.

What the speech did not talk about, naturally, is the fact of rural distress, indicated by the steady decline in inflation-adjusted real wages in rural India over the last five years, which explains the lack of energy in consumer good sales. Nor did the finance minister spend time discussing externalities such as India’s drop of nine rungs in Transparency International’s Corruption Perception Index for 2023. Why pre-empt a talking point for the woefully deficient Opposition, after all?

The 11.1% increase in the Budget’s outlay on capital expenditure to Rs 11,11,111.11 crore and promise to keep funding, via loans, the state government’s capital expenditure are concrete contributions to shore up the growth momentum, besides serving to warm the cockles of two diverse kinds of hearts: of the numerologist and of the computer geek, whose binary maths consists of ones and zeroes.