© Reuters. A labourer sits on a cart loaded with spice sacks at a wholesale market, a day before Indian Prime Minister Narendra Modi’s government presents its final budget, ahead of the nation’s general election, in the old quarters of Delhi, India, January 31, 2024
By Nikunj Ohri and Shivangi Acharya
NEW DELHI (Reuters) – Finance Minister Nirmala Sitharaman said on Thursday India’s economy was going through a transformation as she rose to present the government’s last budget to parliament before a national election due by May.
The interim budget for 2024/25 is being seen as an economic manifesto for Prime Minister Narendra Modi’s ruling party and will give cues to the market on its plans for fiscal consolidation, borrowings and future taxation policy.
“The economy has undergone a profound transformation,” Sitharaman said to the thumping of desks.
Modi is leading the election race by a distance because of his personal popularity and the government is under little pressure to announce populist schemes, analysts say.
There are weak spots in the economic picture, though. While the economy is seen growing at a record beating 7.3% for the financial year ending March 31, 2024, consumption which accounts for close to 60% of GDP, has remained weak growing at just over 4%.
Weak growth in wages and high inflation has hurt lower income earners, particularly in rural areas, impacting their ability to spend on even items of daily use.
Sitharaman will be looking to step up cash schemes for the poor, experts say.