Union Budget likely to focus on middle-class in view of 2024 LS elections

Kochi: There would be high expectations, especially among the middle-class sections of society, when Finance Minister Nirmala Sitharaman presents the last full-fledged Union Budget before the Lok Sabha elections in 2024.

Smart finance ministers resort to maximum spending in the fourth year of their term after mopping up resources during the previous years. With direct tax collections expected to register a 20 per cent increase this year, cuts beneficial for the middle class – including on direct taxes – are keenly awaited in the budget, which will be presented on February 1.

The observation of Sitharaman that she hails from a middle-class family is an indicator of the budget proposals.

The five main focus areas of the Union Budget 2023 are expected to be:

Inflation: The target set by the government to bring the inflation rate down to below 6 per cent has already been achieved. The rate even touched 5.7 per cent, which is much below that of developed countries. In European countries, inflation is currently around 10 per cent.

GDP: Even the International Monetary Fund (IMF) has forecast a nearly seven per cent (6.9) growth of gross domestic product (GDP) for India. This figure is three per cent more than that of several big economies.

Liberalisation: With the election year ahead, the government is unlikely to announce economic liberalisation programmes which could invite opposition from various sections of the people.

Unemployment: The unemployment rate in India currently stands at 8.3 per cent. Therefore, the government is under pressure to create large job opportunities. At the same time, industrial production is witnessing little growth. Consequently, the government would be announcing big allotments for large basic infrastructural projects to create employment. In the previous budget, Rs 7.5 lakh crore was dedicated for the purpose and the figure is likely to go up this time.

Populist programmes: As too many populist programmes in the budget would damage the country’s image as India takes over the leadership of G20 countries, they are not expected this time. Similarly, protectionist measures for the local economy from imports also may have to be avoided.