Interim budget vs actual budget analysis: Take cues from what happened in 2019

As the stock market keenly awaits the Finance Minister Nirmala Sitharaman's interim Budget for FY25, a look a what happened in the interim Budget of 2019 could offer some cues. The actual Budget of 2019 was built on the foundation laid by the Interim Budget, with continued emphasis on agriculture, infrastructure, social welfare, and technological advancement, cited DRChoksey FinServ Private Limited.

"Both budgets aimed to balance economic growth with fiscal prudence. The actual Budget, while keeping the core areas of the interim Budget intact, expanded the scope in certain areas, particularly in infrastructure and social welfare schemes," the Deven Choksey Research suggested.

In the case of agriculture and rural development, the interim Budget 2019 focused on increasing support for farmers, including the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme which aimed to provide income support to small and marginal farmers. DRChoksey FinServ suggested that the actual Budget continued emphasis on agriculture with plans for forming 10,000 new Farmer Producer Organizations and the "Pradhan Mantri Matsya Sampada Yojana" (PMMSY) for fisheries.

In the case of infrastructure, the interim Budget suggested significant investment proposals in infrastructure, including developments in roads, railways, and digital villages.

The actual Budget continued to focus on infrastructure with an announcement to invest in railways and roads, including the upgrade of 1,25,000 kms of road length under Pradhan Mantri Gram Sadak.

As far as tax proposals were concerned, the interim Budget focused on tax relief for middle-class taxpayers and simplifying tax administration. It announced increase in standard deduction from Rs 40,000 to Rs 50,000. The actual Budget continued with the tax relief and made further proposals, including enhancing the surcharge on higher income groups. Also, the increase in standard deduction were further confirmed during the actual budget, the brokerage noted.

In the case of social security and welfare, the interim Budget introduced the Pradhan Mantri Shram Yogi Maandhan for pension to unorganized sector workers. The actual Budget extended pension benefits under the “Pradhan Mantri Karam Yogi Maandhan Scheme” to retail traders and small shopkeepers.

For MSMEs and traders, the interim Budget proposed a 2 per cent interest rebate in the case of MSMEs registered under GST. The actual Budget later than year announced loans up to Rs 1 crore within 59 minutes through a dedicated online portal.

Both budgets announced a significant allocation for defence, with the defence budget crossing Rs 3,00,000 crore for the first time.

As far as the economy is concerned, interim Budget proposed a total expenditure of Rs 27,84,200 crore with a fiscal deficit of 3.4 per cent of GDP. The actual Budget suggested total expenditure of Rs 27,86,349 crore, with a fiscal deficit target of 3.3 per cent.

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