Budget 2024 shows Modi govt's priority areas have changed after election results

Between Finance Minister Nirmala Sitharamans presentation of the interim budget on 1 February and the Union budget on 23 July, the main event was the Lok Sabha election that brought the BJP-led NDA back to power but with a reduced majority..

The impact of this sole event is evident in the differences between the two budgets, which not only inform us about the shift in the Narendra Modi governments stance towards fiscal policy but also tells us how the ruling party is reading the election results and what it intends to do about them...

While the first area that Sitharaman had emphasised in her budget speech was agriculture, the only major change in allocation towards this sector is Rs 4,700 crore for the Pradhan Mantri Annadata Aay Sanrakshan Yojana, under which remunerative prices are supposed to be provided to farmers. Further, while the government has continued the emphasis on infrastructure expenditure, the only major change in allocation from the interim budget is an additional allocation of Rs 6,000 crore for road works...

Since the Union budget envisages additional expenditure of Rs 54,744 crore over the expenditure budgeted in the interim budget, most of the additional allocations to the purposes and schemes discussed above did not require a reduction in allocations in other areas..

On account of a much larger dividend from the Reserve Bank of India (RBI) than was budgeted in the interim budget, the budgeted receipt on non-tax revenues is about Rs 1.46 lakh crore higher than in the interim budget. While there are some major changes in the direct tax regime the most important being the changes in the rate of tax on long-term capital gains along with removal of indexation and several changes in indirect taxes, these do not add up to major changes in expected receipts..

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