As the Lok Sabha elections approach, the spotlight turns to the interim budget slated for announcement on February 1 by Finance Minister Nirmala Sitharaman. With expectations of limited major announcements, until the new government assumes power post-elections, there is a growing anticipation for the interim budget, especially given the charged election atmosphere in the country.
Gurmeet Singh Chawla, Director of Master Capital Services Limited, suggests that while the fiscal budget may not bring forth significant announcements, the government is likely to focus on strategic spending. Despite the restrained fiscal approach, there is a palpable rise in expectations from the public, fueled by the election fervor.
Chawla highlights the government’s readiness to allocate funds for welfare schemes, projecting a fiscal deficit target of 4.5 percent of GDP by fiscal year 2025-26. Public expectations include tax reduction targets, benefits for agriculture in rural areas, and an emphasis on capital expenditure to address challenges like adverse weather conditions, the impact of climate change, and inflationary pressures.
Looking ahead, the government’s priorities are expected to encompass digitization, green hydrogen, electric vehicles, and broadband as key focus areas for economic growth. The Center’s plan to allocate around Rs. 4 trillion ($48 billion) for the upcoming financial year reflects a commitment to strategic financial planning. Additionally, the government aims to raise Rs. 510 billion through disinvestment, signaling an effort to meet financial objectives amidst evolving economic conditions, as stated by Gurmeet Singh Chawla.