Budget and electoral tailwinds

With limited fiscal space, the Budget needs to take advantage of the ruling party's recent electoral wins

In the run-up to the presentation of the interim Budget for 2024-25, two major issues have come under scrutiny. One pertains to the scope and size of the fiscal space that the Union government currently enjoys in financing its expenditure plan for the next couple of years. The second issue is about the nature of the government’s political imperative for announcing any fresh expenditure plan to secure the much-needed electoral dividends during the forthcoming general elections. It will be instructive to assess both the issues even as Finance Minister Nirmala Sitharaman prepares to present her first interim Budget.

Growth assumptions are