What you can expect from the interim Budget

With news reports saying the government may go for an interim Budget on February 16, which will seek modifications to indirect tax and may have sops to prop ailing sectors, nothing has been confirmed yet. When asked, former Finance Minister P Chidambaram stuck to a curt reply: “Constitutionally, there is no bar [on giving stimulus measures]. But I don’t know what the minister may do.” CNBC-TV18’s Abhijit Neogy reports.

Speaking to sources in the government and bureaucrats in the key ministries who may be involved in the making of the interim budget, it is learnt that the government is reviewing its earlier stance that there may not be more measures — something it had said after the second stimulus plan.

With the macro-economic parameters going for a toss, there seems to be a sense of urgency. There could be some measures for exporters before the interim Budget — or the vote-on-account as the government may finally choose to call it — or in it, maybe even after it, till the election code of conduct comes into effect.

In terms of specifics, there may be a additional allocation for infrastructure, more fiscal and non-fiscal allocation for exports, a Rs 2,000-crore package for bank recapitalization, about Rs 9,000 crore bond issues for oil marketing companies and a 15% hike for social sector spending.

Reacting to the report, YM Deosthalee, CFO of Larsen & Toubro, said, “What we need is a boost for the infrastructure sector. The consumption level and demand have to go up. If the vote-on-accounts deals with this particular aspect, it will be good for the economy because there is definitely some kind of a slowdown and growth has been hampered in many sectors — we are facing difficulties. So today what is needed is increased consumption as well as increased investment.”