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Interim Budget 2019: Will FM Arun Jaitely stick to convention?

Arun Jaitley
A few weeks from now, Finance Minister Arun Jaitley will present the interim budget for 2019-20 in Parliament. 

Unlike regular budgets, interim budgets, by their very nature, are not meant to be used by the ruling dispensation to announce a slew of schemes/proposals in order to sway the electorate. 

The purpose of these budgets, instead,  is to ensure that the government of the day has the necessary funds in order to carry out its day to day functioning beyond March 31, till such a time the regular budget is presented by a new government. 

Past experience

But quite often, finance ministers of varying political dispensations have shied away from upholding convention. Take for instance the interim budget of 2014-15. 

Then finance minister P Chidambaram made the bold announcement that the UPA government had accepted the long-standing demanded of one rank one pension (OROP) for defence forces. 

But Chidambaram didn't stop there. He also tinkered with indirect tax rates. 

For instance, in order to stimulate the growth of capital goods and consumer non-durables, he proposed to reduce the excise duty from 12 per cent to 10 per cent. He also cut excise duty to provide relief to the bleeding automobile industry and restructured the excise duties for all categories of mobile handsets in order to encourage domestic production of mobile handsets. 

Chidambaram also proposed a moratorium period for all educational loans taken up to March 2009 and outstanding at the end of December 2013. 

In contrast, Pranab Mukherjee shied away from announcing any such major proposals in the interim budget of 2009-10 when he headed the finance ministry. 

Part of the explanation could have been that in the aftermath of the financial crisis of 2008, the UPA government had already announced two fiscal packages in December 2008 and January 2009, leaving very little scope for further announcements in the budget. 

So instead, Mukherjee chose to list down the achievements of the UPA government, making a strong case for its re-election. 

In comparison, in the previous interim budget of 2004-05, then finance minister Jaswant Singh announced several new proposals.  

For one, Singh extended the coverage of Antyodaya Anna Yojana to 20 million BPL families from 5 million. He also proposed the introduction of a farm income insurance scheme in 20 districts on a pilot basis, which was to be subsequently extended to 100 districts across the country.

Another scheme to revitalise the cooperative credit structure was envisaged with an outlay of Rs 15,000 crore in the budget. Further, Singh proposed to reduce stamp duty on all instruments where the authority to fix rates vests with the central government.

But the fundamental question is will Jaitley follow convention? Or will he, as is being widely speculated, announce a major scheme on the lines of Telangana's Rythu Bandhu in his budget in order to sway the electorate?

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