(LiveMint)
Implicitly signalling a second tenure for itself, the Narendra Modi government proposes to chart its economic thinking in its budget for the year starting 1 April, with focus on an ambitious expenditure programme. The finance ministry plans to present a full budget on 1 February, a senior government official said. Budget 2019, which will be the last by the present government ahead of the 2019 Lok Sabha elections in May, going by established practice should be a vote-on-account, with government seeking Parliament approval for expenditure from the Consolidated Fund of India for the interim period.
Lok Sabha elections are scheduled in the first half of next year as the incumbent government will complete its five-year tenure in May. If indeed the government goes through with its plans, not only is it signalling its confidence about being re-elected, it is also reworking an established precedent. Earlier, the government had advanced the presentation of the Union budget to 1 February so as to let government departments undertake spending from the beginning of the fiscal. Now it is effecting a similar departure on the grounds that an economy of the size of India cannot afford to lose direction in the intervening period till a new government takes charge.
Signalling policy continuity in the budget is the correct approach, said D.K. Srivastava, chief policy adviser at EY India. “As long as no major policy changes including tax policy are undertaken in the budget and expenditure approval is taken for the relevant period, then it would be an appropriate approach,” he added.
