'No spectacular announcements' coming up in February 1 budget, says FM Nirmala Sitharaman
Dec 7, 2023
Synopsis
In line with tradition, the upcoming budget by the Modi government is expected to be an interim budget as the Lok Sabha elections are scheduled for early next year. The full budget for the financial year 2024-25 will be presented after the formation of the new government following the general elections. Union Finance Minister Nirmala Sitharaman clarified today that the Vote on Account does not include any significant announcements.
Don't expect any big bang announcements in the Modi government's last budget ahead of the 2024 polls. In keeping with the tradtion, it will be an interim Budget as the elections for the Lok Sabha are due early next year. The full Budget for FY25 will be presented after the formation of the new government after the general elections.
Union finance minister Nirmala Sitharaman today said that "no spectacular announcements are made in the Vote on Account. The interim Budget that the government presents is just to be able to meet the expenditure of the government until a new government comes in." This will be the sixth Budget of Finance Minister Nirmala Sitharaman, who presented her first full Budget in July 2019. The interim Budget 2024-25 is likely to be presented on February 1. Prime Minister Narendra Modi-led government scrapped a colonial-era tradition of presenting the Budget at February-end. Former finance minister Arun Jaitley started the practice of presenting the annual Budget on February 1 in the year 2017.
In September this year, the Finance Ministry initiated the process to prepare the interim Budget for 2024-25 by inviting inputs on expenditure from different ministries and departments. The Budget Estimates for 2024-25 will be provisionally finalised after completion of pre-Budget meetings. During the pre-budget meetings, the requirement of funds for all categories of expenditures, along with receipts of ministries or departments, is discussed.
On Wednesday, the Indian government sought parliament's approval for additional spending of Rs 1.29 trillion in the current fiscal year, mainly towards higher subsidies for farmers and a rural job employment programme. The government said the net additional spending for the current fiscal year ending March 31, would be Rs 58,378 crore, while the rest would be accommodated by reshuffling expenses.
The additional spending this fiscal year will not lead to widening of the budget deficit beyond the target of 5.9% of gross domestic output as tax collection is likely to be higher than expected, Reuters had reported, citing government officials, who did not want to be identified.
In 2019, interim finance minister Piyush Goyal had presented the interim Budget 2019-20 while P Chidambaram had presented the previous UPA government's Vote-on-Account in February 2014.
What is vote on account?
An outgoing government presents only an interim Budget or seeks a vote on account. It leaves it to the next government to present the full Budget. Vote on account is the permission to withdraw money from the Consolidated Fund of India in that period, usually for a few months. Vote on account is a formality and requires no debate. Essentially, vote on account is the interim permission of the parliament to the government to spend money.
Finance Minister Nirmala Sitharaman on Thursday said any move on imposition of cross-border adjustment tax by developed countries to meet their green commitments is morally wrong and goes against the interest of developing countries of 'Global South'. Her comments come in the backdrop of the European Union's announcement to impose carbon tax on imports from certain sectors.
"But cross-border imposition (of tax) and that money going towards somebody else's green agenda, if anything, is not moral at all," Sitharaman said at the CII Global Economic Policy Forum.
[The Economic Times]
