Work on FY25 full Budget begins ahead of 2024 Lok Sabha elections

Ahead of the general elections, bureaucrats have started preparations for the full Budget for financial year 2024-25 (FY25) expected to be presented either in June or July, official sources said.

While any major policy changes or announcements would be factored in only after the new government comes into power, the official sources indicated that the work had begun on several other aspects of the Budget.

Industry sources said they had shared certain tax proposals that are being considered by the finance ministry. “We are

expecting a consultation once the new government takes over and the Budget exercise is in full swing,” a senior industry executive said. Separately, ministries are preparing a vision document for the 100 days after the elections and the next five years towards achieving the Viksit Bharat goal.

Thrust on infrastructure and capital expenditure is expected to continue in the Union Budget for FY25.

Last month, Finance Minister Nirmala Sitharaman said next-generation reforms would be on top of the government’s agenda in its third term. The plan will touch upon factors of production, such as land, labour, capital, and entrepreneurship, along with digital infrastructure.

“The reforms will touch on all factors of production — be it land, labour, or capital. I’ll also add one, which may not fit into the traditional definition of what factors of production are, and that is digital infrastructure,” she said at the Federation of Indian Chambers and Commerce of Industry’s national conclave on Viksit Bharat@2047: Viksit Bharat & Industry.

On February 1, Sitharaman had presented the Interim Budget sticking to the fiscal consolidation glide path that had previously been announced, which is supposed to take the fiscal deficit down to “below 4.5 per cent” of gross domestic product, or GDP, by 2025-26.

The fiscal deficit for 2024-25 is projected to be 5.1 per cent of GDP; that will do more than half the work of getting to 4.5 per cent from the 5.8 per cent of GDP that the deficit is expected to be in the ongoing financial year.

The Interim Budget, which was a vote on account, essentially made provisions for managing expenses and revenues for a short period until a new government is elected. A full Budget for the remaining portion of the financial year will be presented after the new government takes office after the general elections due in April-May. The government would also announce the details of the reforms-linked 500-year interest-free loans to states worth Rs 75,000 crore.

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