India’s Interim Budget: A Look at the Government’s Financial Plans Until the National Elections

The Finance Minister of India, Nirmala Sitharaman, has unveiled an interim budget to cover government expenditures until the national elections in May. The budget prioritises increased investment in infrastructure projects, the provision of housing for impoverished villagers, and the reduction of the fiscal deficit.

In addition to these measures, the government aims to enhance the skills of young people and support small and medium enterprises to stimulate job creation. Despite substantial subsidies to bolster manufacturing, the current administration has faced criticism for failing to generate sufficient employment opportunities.

With the upcoming national elections, there are expectations of populist incentives to attract voters. However, the interim budget does not include significant new spending programmes. The budget will require approval by the Parliament, and a comprehensive budget for the entire year will be presented by the new government following their assumption of power.

Sitharaman has also announced plans to construct 20 million affordable homes over the next five years, in addition to the 30 million homes already built. Furthermore, the government has allocated £145 billion for infrastructure projects in the short-term budget. The finance minister has stressed that government policies will be focused on the development and empowerment of the economically disadvantaged, farmers, youth, and women.

Another significant announcement is the government’s commitment to bolstering the electric vehicle ecosystem by supporting EV manufacturing and the development of charging stations. Additionally, there are plans to encourage the adoption of electric buses for public transport, although the specifics regarding cost and timelines were not disclosed.

Despite global challenges and geopolitical risks, India anticipates a 7% economic growth in the next fiscal year, following a 7.3% expansion in the current fiscal year ending on March 31. However, the International Monetary Fund has a more conservative estimate of 6.7% GDP growth for India in the current financial year.

India surpassed the United Kingdom last year to become the world’s fifth-largest economy with a GDP of £3.7 trillion. Looking ahead, the Modi government envisions India becoming the third-largest economy in the next three years, with a GDP of £5 trillion.

It is important to note that India has attracted £596 billion in foreign direct investment over the past nine years, and the government is engaged in negotiations for trade treaties with various countries to support India’s aim of becoming a developed nation by 2047.

In conclusion, India’s interim budget reflects the government’s efforts to address critical areas such as infrastructure, affordable housing, job creation, and sustainable transportation. As the national elections approach, the budget will be a key aspect in shaping the country’s financial direction in the coming months.

(Source: Reporting by Sibi Arasu for Associated Press from Bengaluru, India)