Chidambaram to present interim budget today

Finance Minister P. Chidambaram will present the interim budget in the Lok Sabha today.

The vote-on-account will authorize the government to release expenditure on different heads till a regular budget is presented.

Before the concluding winter session of parliament, Chidambaram had said the government would only tinker in areas that are essential to revive the economic growth which might include some changes in excise and service taxes.

On Sunday, Chidambaram gave final touches to the interim budget or Vote On Account for fiscal 2014-15.

Chidambaram will be walking a tightrope when he presents the interim budget. It is expected that he might be doling out more funds to woo voters and tax cuts to support industry while projecting a lower fiscal deficit before elections.

According to official sources, Chidambaram is likely to make a last-ditch attempt to win back voters by announcing more funds for health, rural jobs, roads and food subsidies, and to speak about the government's achievements in the last ten years.

Chidambaram will have slightly more maneuvering room after an auction of telecommunications spectrum which ended on Thursday brought in a much higher-than-expected 61000 crore in bids. The government will get at least 20000 crore upfront in the current fiscal year, with the rest spread out until 2026.

In an election year, India presents an interim budget to parliament for approval for planned expenditure for three to four months, but leaves it to the next government to announce major policy steps in a full-year budget after the polls.

Chidambaram is expected to cut factory-gate duties on products like autos to support the manufacturing sector, extend an interest subsidy on bank loans to exporters, farmers, and offer tax concessions for poorer regions.