Finance Minister Nirmala Sitharaman will present the last full budget before the Lok Sabha elections on February 1. Usually, the budget of the year before the polls contains various public appeal announcements. But Union Finance Ministry sources say that instead of announcing any new public appeal, this year’s budget will focus on spending more on infrastructure. So that Russia can boost the economy clouded by the new crisis caused by the war in Ukraine.
Statement from an official of the Union Finance Ministry
An official of the Union Finance Ministry said, “The Modi government is already spending a substantial amount of money on public welfare projects. Funds will be allocated to those projects only as per need. There is no possibility of any additional charity.” On the other hand, according to BJP sources, more attention will be paid to the promotion of the ongoing central government projects instead of launching any new charity or Janamohini projects. How people have benefited from these projects will be highlighted. If the project work is deficient in any state, the team will also move on that. This decision was also taken in a meeting of BJP office-bearers last week.
Due to the increase in food and fertilizer prices in the world market as a result of the war with Russia, the Modi government has had to allocate additional funds for fertilizer and food subsidies. In the current session of the Parliament, Sitaram presented a proposal to spend another 3.25 lakh crore rupees outside the budget. As a result, there is a question about where the fiscal deficit will reach.
According to Finance Ministry sources, the fiscal deficit may increase in terms of numbers. The budget projected a fiscal deficit of Rs 16.6 lakh crore. In reality, the deficit will be more than that. However, the rate of fiscal deficit compared to GDP is 6. Will remain within the target of 4%. Finance Ministry officials explained that tax revenue is coming in better than the budget estimate. Many spells seem unable to spend their budget allocations. As a result, there will be savings.
Finance Ministry officials claim that the fiscal deficit will be reduced from 6.4% to 1% in the next financial year. From what is clear, the government will not follow the path of charity. The budget will also reiterate the target of reducing the fiscal deficit to 4.5% by 2025-26.
Wrapping up
Finance Ministry officials say the idea is the same. That is the interest rate on the loan to cover the deficit. The interest rate on government bonds increased on the day of the last budget announcement. The way the Reserve Bank is increasing the interest rate to push the price increase, there is a fear that the interest rate on the government bonds will also increase in the future. In the current financial year, the central government has announced a loan of rupees 14.21 lakh crore. Now only waiting for the full budget presentation in February. Let’s see how the government develops the infrastructure.