NEW DELHI, Jan 29 Reuters Indian Prime Minister Narendra Modi is expected to buck a trend of spending big on new welfare programmes in a budget before a general election to instead focus on infrastructure to keep the economy humming while narrowing the budget gap.
Finance Minister Nirmala Sitharaman will announce the budget for 202425 on Feb. 1, which economists say will be heavy on political messaging, drumming up the Modi government39;s pitch of inclusive growth, but conservative in its approach to spending.
The government will likely aim to strike a balance between preelection political messaging, fiscal consolidation needs and continued focus on capex, said Samiran Chakraborty, economist with Citigroup.
For instance, the government may double the annual payout to female farmers to 12,000 rupees, to attract women voters but the policy will only cost 1.44 billion annually, a meagre amount in the government39;s overall spending, according to a Reuters report.
The government will also likely keep its major subsidies in check for the next fiscal year that starts from April 1 at current year39;s level at around 48 billion.
Modi extended his free foodgrain programme for the next five years, and that too will incur very little additional spending as it has been running a subsidised foodgrain programme for years.
It is planning to reduce its fiscal deficit, which is the difference between the expenditure and revenue collected, by at least 50 basis points in 202425,…