No 'spectacular announcements' in interim Budget, says FM Sitharaman

"Budget that will be announced will just be a vote on account because we will be in election mode, and elections will happen during the coming summer", the FM said

Union Finance Minister Nirmala Sitharaman on Thur­sday played down expectations for the upco­ming interim Budget in February, ruling out any “spectacular announcements” before the general elections.

“I am not going to play spoilsport, but it is a matter of truth that the February 1, 2024, Budget that will be announced will just be a vote on account because we will be in election mode, and elections will happen during the coming summer. So the Budget will just be to meet the expenditure till a new government comes. So no spectacular announcements are made at that time,” she said at an event organised by the Confederation of Indian Industry (CII).

“So you may have to wait till the new government comes in July. Things have to wait till then,” the FM added.

A vote on account is a special provision under which the government seeks Parliament’s nod for incurring essential expenditures required for a limited period of time until a regular Budget is presented by a new elected government. Though many governments in the past have refrained from making major policy announcements during the vote on account, there is no constitutional bar and exceptions exist.

In the interim Budget presented by Piyush Goyal, who was holding additional charge of the finance ministry in 2019, the government introduced the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) for the farmers and provided a slew of income tax incentives to the middle class.

Sitharaman said the move by developed countries to levy a border adjustment tax to fund their green commitments was “not moral” and was against the concerns of developing nations.

“I want to make my industry green, so I will impose on you a certain tax because you are coming up with non-green products and with that money, I will make my industry green -- border adjustment tax logic just goes against the concerns of the Global South,” Sitharaman said.

The finance minister said every country would have to generate resources to meet their green commitments at the global stage. “But cross-border imposition and that money going towards somebody else’s green agenda, if anything, is not moral at all,” she added.

Sitharaman’s comments come in the backdrop of the European Union's announcement to impose a carbon tax on imports from certain sectors. The Carbon Border Adjustment Mechanism will come into effect from January 1, 2026, but from October 1 this year, domestic companies from carbon-intensive sectors, such as steel, aluminum, fertilizer, and hydrocarbon products, are mandated to share carbon emission data with the EU.

Later, replying to a discussion on the state of the economy in the Rajya Sabha, Sitharaman said India’s economic growth had been supported by all sectors and that the country had maintained its fastest-growing major economy tag.

She said the Indian rupee stands stable against an ever-increasing US dollar and that cannot happen unless the Indian economy and its fundamentals are strong. “It’s not a fiction of my imagination,” she said.

Ruling out concerns expressed on household savings, Sitharaman said these were also going towards asset creation. “When households do have some money in their hand, they also want to invest in assets such as having their own house. They are making smarter choices, not just putting in post office accounts. People are now also investing in the retail market and not going through mutual funds,” she said.

“Opening of net demat accounts also reached record numbers. Total demat accounts in India have crossed 130 million, increasing also six times since 2014 when it was only 21.8 million. It has tripled since the onset of Covid-19, which is a remarkable point to be observed,” Sitharaman said.