Finance minister Arun Jaitley on Thursday said the Centre was open to the possibility of presenting a full budget “in the larger interests of the economy”.
Jaitley speaking through a satellite link from the US said the “convention is that an election year budget is ordinarily a vote-on-account”. However “larger interests of the economy (could) dictate what goes into the Union budget”.
Analysts see the statement as a hint the government may consider coming up with a full budget instead of the usual interim vote-on-account.
Jaitley who had flown to the US last Sunday for what officials describe as a “medical check-up” made a televised appearance, seen by many as an attempt to dispel rumours that he may not be able to present the budget on February 1 because of health reasons.
The minister said the “bigger picture” showed India has been able to mark many successes in the economic sphere but also faces “challenges”.
He said he could not name the challenges for budget secrecy reasons. “Some of these challenges cannot afford to wait.”
Though the Indian economy is officially forecast to grow 7.2 per cent this year, job growth has been sparse, farm prices low, insolvency in large as well as small businesses has risen even as markets have reacted in a jittery fashion to the fears of a liquidity crisis after IL&FS defaulted on its debts.
It has been speculated for some time that the coming budget may break from the convention that in an election year the government presents a vote-on-account with no expansion of spending outlays or tax changes, as otherwise it could be construed that it was trying to woo the electorate with promises it could not keep if it is not re-elected.
However, officials have pointed out that the convention was not backed by any legal provisions and could be broken.
They had in private conversations spoken of plans for pre-election packages for farmers, small businesses and the middle class.
Poll pressure
The Narendra Modi government will be facing a general election in April-May this year, just months after losing three crucial state assembly elections in the Hindi heartland. Many believe this has forced the ruling party to open up all stops to woo disenchanted voters. Jaitley, however, hinted that the government would try to stick to the fiscal deficit target by stating that he personally felt that “fiscal prudence gets rewarded.”
On Thursday, Jaitley also hit out at political rivals in a blog that is being seen as an effort to show it is business as usual. He criticised “compulsive contrarians” who have “no qualms about manufacturing falsehood”, citing the Justice Loya case, the Rafale deal and the CBI crisis.