The Interim Budget for 2024-25, to be presented by Finance Minister Nirmala Sitharaman on February 1, is unlikely to be inflationary, Reserve Bank of India Governor Shaktikanta Das said.
“I don’t have any inside information about what the government will do or what the finance ministry will do on the budget. But going by the past track record and going by the kind of measures the government has been taking in recent months….what comes out very clearly is that the government is very particular that inflation should be brought down and there is appreciation of the fact that supply-side measures can be done only by the government,” Governor Das said.
After delivering the keynote address at the Mint BFSI Summit, Governor Das answered a few queries from Mint Editor Ravi Krishnan and members of the audience. Edited excerpts from the interaction.
With general assembly elections around the corner, the interim Budget is expected to focus heavily on meeting its fiscal deficit targets and expenditure demands till the next government is elected. Finance Minister Nirmala Sitharaman has already indicated that the upcoming Budget will primarily focus on meeting government expenses until the formation of a new government. So, any major announcements in the interim Budget seem unlikely. However, as GA elections are near, the Budget may feature measures with mass appeal, such as tax reductions or subsidies, and there could be opportunities to streamline tax brackets and rules for individual taxpayers. In terms of themes, we are looking at infra, power, banking, and auto with much zeal for the next year. The same is reflected in the picks for our flagship “India Growth” basket.
Sources reveal that Union finance minister Nirmala Sitharaman’s pre-election budget is set to focus on welfare schemes for five key sections of society—women, poor, youth, farmers and tribals—as the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) aims a third term in office on the back of Prime Minister Narendra Modi’s promise of inclusive growth.
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