The fifth budget to be presented by finance minister Arun Jaitley comes against the backdrop of interesting circumstances. Not only is it in the middle of a busy election year—eight state assemblies go to polls—and just a year ahead of the 17th general election, it also comes in the midst of widespread agricultural distress and low investment levels in the economy.
Structural policy reforms such as demonetization and the rollout of the goods and services tax have slowed the economy and squeezed revenue receipts—resulting in rising fiscal pressures. Jaitley will, therefore, have to strike a delicate balance between earmarking fresh resources to alleviate rural distress and incentivising an investment revival while keeping an eye on the electoral calendar at the same time.
“First part of budget session to be held from 29 January to 9 February, budget to be presented on 1 February. The second part to be held from 5 March to 6 April," Kumar told reporters on the last day of the winter session. The economic survey will be tabled on 29 January, he added.
For the second time, the budget will be presented on 1 February. In 2016, the government advanced the budget presentation to the first day of February, departing from the practice of presenting it on the last working day of the month, to give more time to departments to spend the money allocated to them.
The upcoming budget session also comes amid deteriorating relations between the Treasury and the opposition benches—something that will worsen as the state elections kick off. The Congress, energized after doing unexpectedly well in Gujarat, is looking to forge common cause with other opposition parties.
The problem for the government has further aggravated because the controversial bill to end the practice of instant triple talaq was not passed by the Rajya Sabha in the winter session and is expected to again come up for discussion in the budget session.
“With this being the last budget of NDA before elections, the government is expected to focus on agriculture. Job creation will also be a major aim, which could see extra measures for the small and medium enterprises," said N.R. Bhanumurthy, a professor at the National Institute of Public Finance and Policy. He added that the government may commit to sticking to the targets set out as per the fiscal responsibility and budget management Act in the budget but may choose to deviate later due to uncertainty in revenues.