Narendra Modi government likely to present full Union Budget instead of ‘vote on account’
The Narendra Modi government has issued a clarification reagrding the upcoming Budget. There were reports that the government is likely to present full Union Budget on February 1st on Friday. However, the Union Finance Ministry has issued a clarification. “This Budget will be called Interim Budget 2019-20 and therefore, don’t have any confusion on this issue,” the statement read. Earlier, the sources had said that instead of ‘vote on account’, the Centre is planning for the full exercise. This would also be the last budget of the Modi government. The Budget Session of Parliament will begin on January 31 and end on February 13. Political pundits say that the Budget is like the election manifesto of the ruling party. Many feel that this would be the last chance for the Modi government to impress the masses.
There is still suspense over the who will present the Interim Budget as Finance Minister is currently in the US undergoing treatment. Due to this, Piyush Goyal has been given additional charge of the Finance Ministry. There are speculations that Goyal is likely to present the full budget.
Rajya Sabha Chairman M Venkaiah Naidu and Lok Sabha Speaker Sumitra Mahajan have called separate all-party meetings. Sumitra Mahajan has called a meeting on Wednesday, while Venkaiah Naidu has invited floor leaders of all parties on Thursday morning before the commencement of the session. Both Vice-President Naidu and Sumitra Mahajan have called the meeting for the smooth functioning of their respective houses during the session, officials said. The Budget Session will be the last parliamentary session of the Prime Minister Narendra Modi-led government, before the general elections due this year.
Beside these two meetings, the government is also expected to call a similar meeting of leaders of all parties from both the Houses on Wednesday, which the prime minister may also attend.
Meanwhile, the yields on India's benchmark sovereign bonds were hovering around 7.6 per cent ahead of the Interim Budget, according to a report by Singapore banking group DBS. The yields of the most traded 2028 INR sovereign bond were bid in the 7.5-7.6 per cent range and are up around 18 basis points since late-2018.
Coming ahead of the general elections in April-May 2019, the Union Budget will express the intent of the government, it will outline expenditure and revenue projections for FY20, assuming the incumbent is voted back to power. An overview of the past five years' achievements and blueprint for the upcoming year is also expected to be a part of the announcement, according to the DBS report.
"With the FY19 target of 3.3 per cent of GDP likely to be met (any slippage to be limited to 3.5 per cent), we expect the FY20 deficit target to be set higher at 3.2-3.3 per cent vs recommended 3.1 per cent," wrote DBS Group Research economist Radhika Rao and Strategist Duncan Tan.
Opposition political parties have meanwhile upped the ante, as the Congress party promised to provide a 'Minimum Income Guarantee' to the poor if voted to power, increasing pressure on the incumbent to address the ongoing farm distress. "If fiscal deficit targets are along our expectations, bond markets are unlikely to witness big swings," wrote the duo.
(With inputs from PTI)