Finance Minister Nirmala Sitharaman said on Thursday that India’s economy was undergoing a transformation as she rose to present the government’s latest budget to Parliament before national elections in May.
The interim budget for 2024/2025 is seen as an economic manifesto for Prime Minister Narendra Modi’s ruling party and will provide clues to the market on its plans for fiscal consolidation, borrowing and future tax policy.
“The economy has undergone a profound transformation,” Sitharaman said to the thumping of desks.
Modi is leading the election race from a distance due to his personal popularity and the government is under little pressure to announce populist plans, analysts say.
However, there are weaknesses in the economic picture. While the economy is growing at a record 7.3 percent for the financial year ending March 31, 2024, consumption, which accounts for almost 60 percent of GDP, continues to grow weakly at just over 4 percent.
Weak wage growth and high inflation have had a negative impact on lower incomes, especially in rural areas, affecting their ability to spend money on even everyday items.
Sitharaman will try to ramp up cash programs for the poor, experts say.
First print: February 1, 2024 | 11:16 am IST