Poll posture: On the 2024 Interim Budget

Slowing growth and rising inequality must both be tackled head-on

The Budget numbers posit a continuing journey on the path of fiscal consolidation, with the Revised Estimates (RE) pegging the current year’s fiscal deficit at 5.8% of the GDP, a 10 basis points improvement from last February’s Budget Estimate (BE) of 5.9%. This, the Minister has achieved by pruning effective capital expenditure by ₹1 lakh crore in the RE, a moderation in nominal growth estimates notwithstanding. For 2024-25, she has projected a sharper consolidation and pegged the deficit at 5.1% by factoring in a 14% jump in revenue receipts on a BE basis, that is expected to help offset an 11% increase in estimated capital expenditure to ₹11.11 lakh crore. Ms. Sitharaman, who emphasised a tripling in the capital spending outlays over the past four years that had had ‘a multiplier impact on growth and employment creation’, however, glossed over the fact that the budgeted increase in capital spending next year is set to be sharply lower than the 28% jump in the RE versus last fiscal’s actuals. At a time when official estimates for private consumption spending show growth at its lowest ebb since the pandemic, the Budget’s stress on fiscal prudence does carry the risk of undermining economic momentum. The bigger challenge is the more worrying possibility of rising inequa