Government is in no hurry regarding economic reforms, new announcement on old pension possible

After hoisting the victory flag in the assembly elections, the BJP-led central government has gained political strength, but it is in no hurry regarding economic reforms. In short, before the next general elections, there will be no pace in the slow disinvestment process of public sector undertakings, nor will there be any effort to implement the earlier decisions regarding the privatization of public sector banks and insurance companies.

However, the way PM Narendra Modi has given priority to women, youth, farmers and the poor, it is quite possible that some scheme or the other may be announced for all these sections in the upcoming budget. On the other hand, activities are going to intensify in the Finance Ministry regarding the next interim budget.

Usually, the budget of the last year of the government's tenure is limited, in which vote-on-account approval is taken from the Parliament only for the statutory expenses of the next few months, but the Modi government has made a lot of changes in this tradition. There were a lot of announcements in the interim budget of 2019, which were later implemented after coming back to power.

After the results of the state assembly elections were declared on Sunday, PM Modi said at the BJP headquarters that his government will live up to the expectations of the youth, women, farmers and the poor. This statement is being seen in connection with furthering the relief schemes being given to these four sections in the upcoming budget and some new announcements. However, this fortnight the Union Cabinet has made its intention clear by extending the PM Garib Kalyan Anna Yojana for five years to provide free food grains to the poor class.

What will be given to the general public by the government will be known later, but there will be no problem at the treasury level in this regard. Continuous growth in GST collections, fiscal deficit remaining exactly as per the target and faster than expected pace of economic growth are the three factors due to which the Finance Ministry seems capable of providing additional resources to some sections.

The average GST collection from April to November in the current financial year has been Rs 1.66 lakh crore. This is 11.9 per cent more than April-November of the year 2022-23. At the beginning of the year 2023-24, it was believed that the prices of crude oil in the international market would become the biggest challenge before the treasury management, but this did not happen. Except for a few months, crude has been at $80-85 per barrel or even below. The position of direct tax collection is also better than the expectations of the government. After the GDP growth rate being 7.7 per cent in the first half, it is expected that the situation of revenue collection for the entire financial year will also be better than expected.

Everyone will keep an eye on what decisions the government takes regarding the old pension scheme. Earlier, Congress had made it an election issue by implementing the old pension scheme in states like Himachal Pradesh and Chhattisgarh. After this, the Central Government has constituted a committee to give suggestions on making the New Pension Scheme (NPS) more attractive. Based on the report of this committee headed by Finance Secretary TV Somanathan, there is a possibility of some new announcements on pension schemes from the Centre.