New Budget mantra may be ‘continuity, with improvement’

Sitharaman, who assumed office on Wednesday, is currently focused on finalising Budget proposals, the people added, asking not to be named

The first Union Budget of the Modi 3.0 regime, and the first by finance minister Nirmala Sitharaman in her second term, is expected to maintain “continuity with improvement” while focusing on ease of life for citizens and businesses, two people aware of the matter said.

Nirmala Sitharaman is the first woman Cabinet minister to hold the finance portfolio for a second consecutive term. (PTI)

Sitharaman, who assumed office on Wednesday, is currently focused on finalising Budget proposals, the people added, asking not to be named. “This is her main task for the first month,” one of them said. Sitharaman is the first woman Cabinet minister to hold the finance portfolio for a second consecutive term.

“There must be policy continuity with necessary improvements to facilitate ease of living,” the person added.

“The Budget for FY25 is the top priority for North Block, which will take forward the good work that the Modi government has done in the last 10 years, and pave a path to make India the third-largest economy in the world in the next five years,” the second person said.

The Modi government was able to transform the Indian economy from the “fragile five” to the fifth largest in the world in his two terms, the person added. “The government aims for a ‘Viksit Bharat’ (developed India) by 2047, and making it the third largest economy of the world by 2024-29 is an important milestone,” the person said.

The government had tabled an interim Budget in February on account of the Lok Sabha elections. The full Budget is expected to be presented in Parliament by the third week of July, the second person added.

“Not only has the government been able to successfully navigate the Indian economy from the devastating impact of Covid that hit us in March 2020, it also put it on the high growth trajectory. The coming Budget will maintain the pace, with a continuous focus on inclusive development. Recent experiences, feedback and other learnings will be used to improve proposals to achieve the aim of Viksit Bharat,” the person said.

“The Budget will emphasise that the Indian economy would remain the fastest growing major economy of the world in years to come while keeping inflation under check,” the person added.

The National Statistical Office (NSO) on May 31 projected that India’s GDP grew at 8.2% in 2023-24, higher than what was estimated by both government and private forecasters. The Reserve Bank of India on June 8 revised the GDP growth estimate for FY25 to 7.2% from 7%. According to the latest official data released on June 12, India’s retail inflation rate eased to 4.75% in May, giving some room to policymakers to boost growth.

The finance ministry will consult stakeholders, particularly states before finalising the budget numbers, the first person said, adding that it could coincide with a Goods and Services Tax (GST) Council that is likely soon.

A third person, a government official, said the finance ministry is in “top gear” to finalise Budget numbers under the guidance of the finance minister, who has started working immediately after assuming the office.

“The political direction of the Budget is absolutely clear – to make India the third-largest economy of the world within next five years. Hence, the Budget will continue to focus on welfare schemes for the underprivileged, raising farmers’ income, development for and by women and young people, with micro, small and medium enterprises to act as engines of economic growth,” the second person said.

“Some new welfare schemes are expected in the Budget,” he said.

One of the poll promises of the National Democratic Alliance (NDA) was to extend the free health insurance under the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) to all citizens of over 70 years of age. AB-PMJAY currently provides cashless and paper less benefit cover of ₹5 lakh per annum per poor family on floater basis in the empanelled hospitals covering about 12 crore families. The government may also enhance allocations for some of its flagship schemes such as PM Awas Yojana (an expansion of this was announced Monday) and the Mudra Yojana, the people said.

The domestic industry expects the budget to introduce reforms necessary for growth. Confederation of Indian Industry (CII) director general Chandrajit Banerjee said Prime Minister Narendra Modi’s third term will be a “golden chapter” in India’s development journey.

“As India continues to think and act ‘big’ under Modi, continuity in the reform agenda will carry India forward on the path to becoming a developed nation,” Banerjee said.