After Confusion, Finance Ministry Clarifies Budget Will be Called 'Interim'

New Delhi: Amid speculation over the shape of the Narendra Modi government’s last budget before the Lok Sabha polls, the finance ministry on Wednesday clarified that it will be called ‘Interim Budget 2019-20’.

“This Budget will be called Interim Budget 2019-20 and, therefore, don't have any confusion on this issue,” a finance ministry spokesperson told reporters. The spokesperson’s statement referred to what the budget speech and documents will officially be titled.

The statement came a day after officers were reportedly told at a workshop of the Press Information Bureau that the budget will be titled ‘General Budget 2019-20’. This information was shared with some journalists, leading to some confusion. Even after the finance ministry's clarification, some PIB officers insisted that the official press releases pertaining to the budget on February 1 will be titled 'General Budget 2019-20'.

There have been suppositions among markets and policy watchers that, as the government heads into Lok Sabha elections 2019 after losses in three state elections, the 2019-20 budget could be more than just a vote-on-account.

Finance minister Piyush Goyal, filling in for an indisposed Arun Jaitley, could announce a massive nationwide income-support scheme for farmers, as well as a forward-looking commitment to bringing in tax sops for the middle and salaried people if the Modi government were to be elected back to power.

According to the convention, interim budgets do not contain any direct tax proposals that might require an amendment to the Income Tax Act. The finance Bills accompanying the interim budget are short 7-10 page documents meant to extend the existing budgetary provisions from April 30 to July 31, by which time it is assumed that a new or returning government would have prepared and presented a full budget for the financial year.

Past interim budgets have changed indirect tax rates, but, with the goods and service tax now in the purview of the GST council, if a finance minister follows the set convention, he could now only touch customs rates. There is no law that prevents a government from presenting a sixth full budget.

In an interview with Business Standard in late December, Jaitley, who is currently in New York and recovering from a surgery, had said: “I will go by precedence, that in an election year, there are certain things you can present, and certain things you cannot.”

However, appearing an event in Mumbai through video-conference from New York, Jaitley said that while the government would work “within the parameters of the conventions that exist”, the contents of the interim budget would be decided by the larger interests of the economy.

“Ordinarily there should be no reason why we should move away from that convention, but then the larger interests of the economy always dictate what should be in the interim budget… Without getting into specifics, some of those challenges really can’t afford to wait. There would be a necessity to address some of them. We intend to work within the parameters of the conventions that exist,” Jaitley said at the event organised by a business news channel.

By arrangement with Business Standard.

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