As the nation gears up for the upcoming interim budget 2024 on February 1, all eyes are on Finance Minister Nirmala Sitharaman, with expectations running high. This interim budget, scheduled just months before the Lok Sabha elections in May, is poised to play a crucial role in addressing the diverse needs and expectations of various voter segments. Drawing inspiration from the precedent set by the 2019 interim budget, which brimmed with benefits and welfare schemes, citizens are eager to see if the trend continues in 2024.
The upcoming interim budget scheduled for February 1 is capturing heightened interest and expectations, surpassing the typical enthusiasm associated with such budgets. Speculation suggests the ruling NDA’s optimism about returning to power might hinder substantial financial benefits in this interim budget. However, being just months ahead of the Lok Sabha elections in May, there is an anticipation that the interim budget will address voters, particularly specific voter categories. This anticipation finds support in the 2019 interim budget, which lavished various benefits and welfare schemes upon the masses.
Reflecting on the voter-centric approach of the 2019 interim budget, citizens expect a similar display in 2024, especially for the lower economic strata, crucial just before elections. The budgetary offerings will hinge on economic needs and the pivotal voting groups crucial for the NDA’s electoral success. While Finance Minister Nirmala Sitharaman aims to maintain fiscal prudence, the robust state of the economy may afford some flexibility for generous allocations in key areas.
Empowering She Power: Interim Budget 2024
In a nation where women constitute half of the population, their underrepresentation in India’s economy underscores the need for budgetary considerations. Furthermore, the escalating significance of women voters for political parties across India cannot be overstated. Historically, political parties have directed targeted initiatives, such as free bus travel and cash handouts, towards this crucial demographic.
Beyond the societal impact, financially empowering women emerges as a potent strategy to propel India’s economy forward by integrating them into the financial mainstream. Compellingly, the political landscape is also shaped by the fact that women consistently outnumber men at the voting booths. Recent assembly elections in Chhattisgarh exemplified this trend, with women voters surpassing their male counterparts. Additionally, in 32 of Madhya Pradesh’s 230 constituencies, women’s voter turnout exceeded that of men, highlighting the growing influence of female voters in shaping political outcomes.
Empowering Villages: Nurturing Rural India’s Economic Resurgence
Rural India grapples with prolonged depressed demand, aggravated by inflation and unpredictable weather patterns impacting agriculture. Consumer goods companies and analysts note a persistent lag in the demand for daily groceries and personal/home products in villages, trailing behind urban growth in the December quarter. Over the past year, rural volume witnessed a noticeable decline due to inflation and erratic monsoons. According to Kantar, FMCG volume growth for the September quarter was 7.2% year-on-year, with rural FMCG sales expanding by about 6% in the June-September quarter, slightly trailing the urban growth rate of 8%.
To rejuvenate rural demand, Sitharaman could take a cue from the 2019 interim budget, which generously benefited the rural population. This included an annual payment of Rs 6,000 to small and marginal farmers holding less than two hectares of land.
Catering to Taxpayers: Ensuring Inclusivity in the Pre-election Budget
In the lead-up to elections, a pre-election budget must not overlook India’s expanding middle class. While the middle class’s argument for budget benefits might not resonate as strongly as that of rural masses, the lower end, in particular, grapples with the impact of inflation. The government cannot afford to alienate the middle class, often viewed as a pivotal yet unpredictable voting bloc, just months before elections.
To address middle-class concerns effectively, the most viable strategy lies in offering income-tax relief. Building on the precedent set by the previous interim budget, which granted income tax rebates for those earning up to Rs 500,000, taxpayers at the lower echelons anticipate similar considerations in the upcoming interim budget. Sitharaman could opt to provide, at the very least, basic relief and simplified compliance measures for taxpayers at the lower strata.
Empowering the OBCs: Nurturing Inclusivity in Governance
The Other Backward Castes (OBCs) have emerged as a pivotal voting bloc, with opposition parties advocating for a caste census and highlighting perceived underrepresentation of OBCs in government jobs. While the budget may not explicitly offer caste-specific benefits, Sitharaman has the opportunity to support segments with a significant OBC presence, such as artisans.
In a proactive move before last year’s assembly elections in five states, Prime Minister Narendra Modi unveiled the PM Vishwakarma scheme, allocating Rs 13,000 crore to skill traditional artisans and craftspeople. Sitharaman could extend further benefits, including streamlined access to easier and quicker loans for this demographic.
Despite indications that the interim budget may not feature anything “spectacular,” Sitharaman is poised to address these crucial constituencies through encouraging policies and schemes with prudent fiscal allocations. The focus remains on fostering inclusivity and supporting communities with limited financial outlays.
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FAQ’s
What is an interim budget?
An interim budget is a temporary budget that is presented by the government when it does not have the time to present a full budget or when general elections are around the corner. It only covers the expenses to be incurred and the revenue to be earned through taxes for the coming few months until the new government comes to power. The estimates in an interim budget are presented for the whole year, but it is only a temporary plan to keep things running smoothly until a full budget is prepared. The incoming government frames the full budget, which gives the government of the day spending rights until the end of the financial year (which ends on 31st March). If the government is not able to present the full budget before the end of the financial year, it will require parliamentary approval for incurring expenditure in the new financial year until a new budget is passed.
What is the difference between a full budget and an interim budget?
A full budget is a comprehensive financial plan that outlines the government’s revenue and expenditure for the entire fiscal year. It is presented by the Finance Minister in the Parliament, usually in February, and is followed by a discussion and voting process. The full budget includes the government’s plans for revenue generation, allocation of funds to various sectors, and the expected expenditure for the year.
An interim budget is a provisional financial plan presented by the government when time constraints or imminent general elections prevent the unveiling of a full budget. It specifically addresses expenses and tax revenue for the upcoming months until a new government assumes power. Although interim budget estimates span the entire year, it is a temporary measure to ensure operational continuity until a comprehensive budget is prepared. The incoming government formulates the full budget, granting spending rights until the fiscal year concludes on March 31. Failure to present the full budget by this deadline necessitates parliamentary approval for expenditures in the new financial year until a new budget is passed. Meanwhile, the government, through the interim budget, initiates a vote-on-account to meet essential administrative expenses until the parliamentary approval for the full-year budget.
What can the middle class expect from the upcoming interim budget?
The middle class can anticipate income tax relief, similar to the income tax rebates offered in the 2019 interim budget for those earning up to Rs 5,00,000.
Why are women voters important for Budget 2024?
Addressing women voters is crucial as they form half of the population and have relatively low representation in India’s economy. With this being a pre-poll budget, women voters have consistently outnumbered men at the polling booths.
What can voters expect from the interim budget 2024?
Voters can expect the interim budget to address them and offer various benefits and welfare schemes, aligning with the government’s approach in the 2019 interim budget.