The government is likely to offer more relief and incentives in the run-up to the general elections, sources told CNBC-TV18. While a few announcements have already been made, several additional proposals that are under consideration may be introduced starting in December and could spill over into next year's interim budget.
The government's fiscal position is currently well-balanced, with tax buoyancy and effective expenditure management enabling it to maintain its financial strength for contingencies.
In the latest series of announcements, the government has decided to extend the free food grain scheme, known as the Pradhan Mantri Garib Kalyan Ann Yojana, by 5 years. Additionally, in preparation for state polls, the government has reduced LPG prices in two phases: first through price reductions by the oil marketing companies and second by increasing the Ujwala subsidy.
The government also intends to roll out a new home loan subsidy scheme for urban residents, pending cabinet approval.
It is also likely that some of the welfare announcements may not lead to significant immediate fiscal outflows, and the spending will be spread out over a period. Both the extension of PMGKAY and the new home loan subsidy scheme, each lasting 5 years, are expected to have minimal impact on this year's budget.
So far this fiscal year, spending by certain ministries, including rural development, railways, roads & highways, and the food and fertiliser departments, appears to be slower than in the previous fiscal year.
Nonetheless, the government's total spending remains on track, with 47% of this year's budget utilised between April and September. The finance ministry anticipates that government expenditure will pick up in the second half of the fiscal year and is determined to avoid any "undershooting" of the FY24 budget estimates.
(Edited by : Anand Singha)
First Published: Nov 9, 2023 12:38 AM IST
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