With work on the Union Budget 2023-24 underway, finance ministry mandarins are making it clear the upcoming budget will not aim to make big ticket, radical changes and reforms. Instead, the government will continue its focus on capital expenditure to grow the economy and not rattle voters in a pre-election year. As part of this, keeping a lid on the price rise and ensuring affordable energy and agricultural inputs will be a key focus of the Modi government.
“The forthcoming Budget is not one where one can expect any high-level radical changes in terms of new schemes and reforms. But, the effort of the government will be to continue to do the basic things right and to keep inflationary pressure low," an official said.
The Centre is also fairly confident it will achieve its capital expenditure target of Rs 7.5 lakh crore for this fiscal. "We will stay focused on capital expenditure going forward. In fact, because of the recent global political developments, we are expecting big ticket investments in roads and railways in India to continue," added the official.
The fiscal performance in the current year will also be the basis for the government to keep the deficit in the check next year as well.
“We are confident that the fiscal deficit for the current fiscal will stay within the target of 6.4 per cent of GDP. The budget making exercise has just started, but I feel confident that we will be able to achieve our fiscal deficit target of 6.4 per cent of GDP. There will be some basic increase in the rupee amount of the deficit in comparison to the budget estimate, but the ratio of the fiscal deficit divided by revised GDP will be well within the target," a government official said.
As regards popular expectations of some tax relief for the middle class, the official pointed out that it was early days yet in that regard.
"We haven't thought about tax relief as yet. It is a difficult issue at a time of high inflation. We will do our best," an official added.
On asking if the government has the appetite to further extend the PM Garib Kalyan Anna Yojana (PMGKAY), officials said doing so would not be desirable from the fiscal perspective. The scheme has cost an additional Rs 80,000 crore this year because of the current extension beyond September 30 till December 31. Launched in March 2020, the PMGKAY provides free 5 kg of food grains per person per month to about 800 million beneficiaries under the National Food Security Act.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today