Union Finance Minister Nirmala Sitharaman
Credit: PTI Photo
New Delhi: Indicating that the ruling BJP may not resort to new populist measures ahead of the Lok Sabha elections, Finance Minister Nirmala Sitharaman on Thursday said the upcoming Union Budget to be presented on February 1 will not have any “spectacular announcements”.
“I am not going to play a spoilsport, but it is a matter of truth that the budget will be just a vote on account, because we are in an election mode,” Sitharaman said at Global Economic Policy Forum organised by the Confederation of Indian Industry (CII).
She added that the budget would just be to “meet the expenditure of the government till a new government comes to play”.
Although February’s exercise will be an interim budget, typically the government comes up with populist announcements to woo voters ahead of the election. In the 2019 interim budget, Piyush Goyal — standing in for an unwell Arun Jaitley — unveiled a cash transfer scheme for small and marginal farmers and significant tax rebates.
Goyal had announced an outlay of Rs 75,000 crore for FY 2019-20 for a cash transfer of Rs 6,000 annually to farmers under Pradhan Mantri Kisan Samman Nidhi (PM-KISAN).
Tax relief to the tune of Rs 23,000 crore was also announced to woo middle-class voters. Also, income up to Rs 5 lakh got exempted from tax and standard deductions were raised.
In the interim budget presented before the 2014 general election, the then finance minister P Chidambaram had announced a significant reduction in indirect taxes and social welfare measures like concessional loans for students and reform in the pension scheme for the armed forces, ‘one rank one pension’.
Sitharaman, who presented her first budget in July 2019, is slated to present the vote on account or interim budget of the central government on February 1. Vote on account, is essentially, an interim permission of Parliament to the government to spend money for a short period. She also indicated that the 2024 Lok Sabha polls would be held in summer (April-May), brushing aside speculation that the elections will be held at an earlier date by the Narendra Modi government. “The next full budget will be in July,” she said.
Meanwhile, the finance minister criticised the imposition of a cross-border adjustment tax by developed countries to meet their green commitments.
She termed such a move “morally wrong” and against the interest of the developing countries of ‘Global South’.
Sitharaman’s comments come against the backdrop of the European Union’s announcement to impose carbon tax on imports from certain sectors. “Every country will have to have resources generated to meet demands so that we are better adjusted to the green commitments we have made globally. But cross-border imposition (of tax) and that money going towards somebody else’s green agenda, if anything, is not moral at all,” she said.