What will shape the maths behind budget 2024?

BY A STAFF REPORTER: The Narendra Modi government will soon present the final budget for its second term. With the general election just a few months away, all eyes will be on what is in store for voters. Will we see a continued focus on capital expenditure, will the budget stay true to fiscal consolidation, or will it announce new schemes to woo voters – such as minimum income support for farmers before the 2019 elections? A lot depends on how the Centre looks at its finances.

There are two important figures in the game. First, the country's GDP – the basis that is used to express the government's fiscal deficit. The Centre had set a target of keeping the fiscal deficit at 5.9 per cent of GDP for 2023-24. But nominal GDP growth will be 10.5 percent. According to the first estimate, nominal GDP will grow by only 8.9 percent. That is, the same fiscal deficit target (Rs 17.9 trillion) will now reach 6 percent of GDP.