No spectacular announcements in interim Budget, says FM Sitharaman

Finance Minister Nirmala Sitharaman on Thursday said the forthcoming interim Budget will not have any big-ticket announcements. The Minister is expected to present the interim Budget on February 1, 2024.

It will be her sixth Budget – five full budgets and one interim. As general election will take place next year, which is why there is interim Budget so to take approval from Parliament for expenditure beyond March 31. The new government is likely to move full budget for FY25 in July.

“No spectacular announcements come in that time (in a vote on account). So, you will have to wait till after the new government comes in and presents the next full Budget in July 2024,” the Minister said when asked on whether she would announce a ‘supercharged Budget’ in February during a conference organised by Economic Affairs Department and CII here.

“I am not going to play spoilsport, but it is a matter of fact that the February 1, 2024, Budget that will be announced will just be a vote-on-account because we will be in an election mode. So, the Budget that the government presents will just be to meet the expenditure of the government till a new government is sworn in,” she said.

Rules do not bar the government in majority on the date of presentation of Budget to make new announcements, but the convention has been that successive government have held back on making major policy pronouncements before the election. This holds true even when poll schedule has not been announced or code of conduct has not come into effect.

But there have been breaks from this tradition. In 2019, Piyush Goyal, holding additional charge of Finance Ministry, presented interim Budget before the general elections, announced a ₹6,000 per year cash transfer to 12 crore farmers.

Also, he announced tax sops for the middle class, including hiking the standard deduction available to the salaried class to ₹50,000 from ₹40,000. Along with this, a full tax rebate was announced for individual taxpayers having taxable annual income of up to ₹5 lakh. The 2019 interim Budget had proposed that such taxpayers would not be required to pay any income tax.

Earlier, addressing the conference, Sitharaman said the developed countries’ move to levy a border adjustment tax to fund their own green commitments is “not moral” at all and is against the concerns of developing nations. “I want to make my industry green so I will impose on you a certain tax because you are coming up with non-green products and with that money, I will make my industry green. Border adjustment tax logic just goes against the concerns of the global south,” she said.

Her comments come in the backdrop of the European Union’s announcement to impose carbon tax on imports from certain sectors. The CBAM (Carbon Border Adjustment Mechanism) or carbon tax (a kind of import duty) will come into effect from January 1, 2026. But from October 1 this year, domestic companies from seven carbon-intensive sectors, including steel, cement, fertilizer, aluminium and hydrocarbon products, will have to share data with regard to carbon emissions with the EU.