Striking balance between populism & reform: 2024 Interim Budget tightrope walk for government

Navigating the 2024 Interim Budget, India faces a critical choice between populism and reform. Experts stress the importance of fiscal consolidation for lasting economic stability, underscoring the delicate balance required to shape the nation’s prosperous future.


The 2024 Interim Budget stands at the crossroads of India’s economic trajectory, poised to influence the nation’s financial landscape significantly. An interim budget, by its very nature, holds a unique position, particularly when national elections are on the horizon. It is not the final blueprint but a temporary fiscal plan that allows for the continuity of essential government functions until a new administration takes charge.

The term “interim” itself implies a sense of transition and impermanence, but the impact it carries is far-reaching. In the context of the 2024 budget, the interim nature is accentuated by its unveiling just ahead of the elections, adding layers of complexity and expectations. It serves as a prelude to the full-fledged budget that the incoming government will present, offering a sneak peek into the economic priorities that may shape the country’s future.

This year, the interim budget is not merely a routine fiscal exercise but a pivotal moment in India’s economic narrative. The looming elections amplify the importance of every policy decision, transforming the interim budget into a potential catalyst for either populism or reform. The question that is resonating across boardrooms, households, and financial markets is whether this budget will sway towards populist measures, designed to garner votes, or embrace reformatory policies geared towards long-term economic sustainability.

Populist measures: The people’s perspective

The Finance Minister’s expected generosity in the 2024 Interim Budget continues to dominate conversations about its potential impact. Fatima Naqvi, Partner at Optimyze Finance LLP, says, “Since this will be an interim budget before the elections, the Finance Minister is expected to be very magnanimous in announcing a lot of give-aways for individuals as well as for corporates.”

This anticipation of generosity naturally raises questions about the allocation and utilisation of funds. Naqvi further suggests, “Before allocating further funds, a review should be done, and accountability of officials should be fixed for measuring allocation versus achievement.” This call for accountability underscores the sentiment that the efficacy of budgetary allocations must be a top priority.

Economic reforms and investor expectations


Dr. Nilanjan Banik, economist at Mahindra University, Hyderabad, highlights the promising economic landscape against the backdrop of the interim budget. With India positioned among the fastest-growing large economies globally, Banik emphasises, “While immediate concerns take precedence over major reforms, the capex push, particularly in infrastructure development, remains a key driver for sustained economic growth.”

The integration of digital platforms and financial inclusion initiatives have ushered the informal economy into the formal sector. Banik’s points about rationalising import duties and the importance of real GDP growth provide a comprehensive view of the economic reforms that should be prioritised in the interim budget.

Sonam Srivastava, Founder and Fund Manager at Wright Research, PMS, outlines investor expectations, emphasising a continued focus on fiscal consolidation. She anticipates support for critical sectors such as infrastructure, agriculture, and healthcare. “During the interim budget, the sectors likely to be in focus include infrastructure, agriculture, banking and finance, and renewable energy,” Srivastava notes.

Strategies to check inflation


Jyoti Prakash Gadia, Managing Director at Resurgent India, offering insights into the challenges posed by inflation, says, “The control of wild inflation primarily lies in the domain of the Reserve Bank of India.” He suggests a combination of tax cuts and subsidies as potential strategies to curb inflationary pressures.

Expanding on this, Gadia notes, “For a check on wild inflation, the government can attempt to tweak the supply-side ecosystem and bring a combination of tax cuts and subsidies in the interim budget to put downward pressure on commodities susceptible to wild price rises.”

Rajeev Das, CEO of I-Loan (LoanTap Group), is optimistic about the upcoming interim budget. “Despite inflation being a slight challenge for stability in growth, we remain positive that the economy will grow. Furthermore, the government may announce the narrowing of the fiscal deficit and is expected to continue being growth-oriented,” he contends.

Fiscal responsibility vs. public appeal

Expanding on the global context, Dr. Banik acknowledges that volatile Middle East conditions and their potential impact on essential commodity prices. He cautions, “If the situation continues to be so, it could lead to inflationary trends shortly, hence a populist budget before elections could be an economic trap.”

On the domestic front, Fatima Naqvi emphasises the need for a delicate balance between fiscal responsibility and public appeal. “Setting an inflation target before setting out for the budget could be one way of ensuring smooth economic growth,” she says.

Anil Rego weighs in, saying, “Since political continuation is expected at a broader level, we expect the government to continue its focus on infrastructure to develop ports, airports, railways, and highways, all of which play a pivotal role in advancing the nation’s economic development.”

The government has a tough task ahead of meeting public expectations as well as not losing sight of its economic responsibility.

Challenges and opportunities


Shyatto Raha, Founder & CEO of MyHealthcare, emphasising the need to incentivise healthcare providers and health-tech companies, asserts, “The Interim Budget 2024 should lay emphasis on building an implementation roadmap for healthcare digitalisation, incentivising the healthcare sector to achieve Prime Minister Narendra Modi’s vision of Amrit Kaal 2047 and delivering quality healthcare for all.”

While the expectations rise, the challenges persist. The delicate balance between fiscal responsibility and meeting public expectations remains a tightrope walk for policymakers. The challenge lies not only in making allocations but in ensuring their effective utilisation and accountability.

Focus on fiscal consolidation

Upon examining the diverse perspectives within the realm of economic reforms, a common thread emerges from the insights provided by Dr. Banik, Sonam Srivastava, and Anil Rego. Each expert underscores the critical importance of fiscal consolidation in fostering sustainable economic growth and stability.

Dr. Banik asserts, “The public debt-to-GDP ratio should be viewed in the context of a growing economy. This highlights the interconnectedness of fiscal health with overall economic expansion. Sonam Srivastava adds granularity to the sectoral impact assessment, emphasising, “The robustness in corporate and income tax collections instils confidence,” thereby linking fiscal strength to confidence in financial markets.

Anil Rego points out that the upcoming Vote on Account—Interim Budget 2024 is pivotal, noting, “Key expectations include a continued focus on fiscal consolidation to maintain investor confidence and long-term economic stability.” This aligns with the overarching sentiment that a strategic emphasis on fiscal responsibility is paramount for economic resilience.

These insights converge on the central idea that, as we navigate the complex landscape of economic uncertainties, a steadfast commitment to fiscal consolidation emerges as the linchpin for sustained growth, bolstering investor confidence and fortifying the foundation of long-term economic stability.



As we navigate this critical juncture, the words of those influencing economic policy echo a common theme: a delicate equilibrium between populism and reform is the key to a prosperous future. As the day of the presentation of the interim budget nears, India awaits the unveiling of policies that will shape its economic path in the years to come.

The 2024 Interim Budget carries the weight of expectations and responsibilities. The integration of diverse perspectives, from the need for fiscal accountability to a strategic focus on economic reforms, paints a complex picture. As the nation stands on the cusp of this fiscal announcement, it is not merely a budget but a roadmap that will shape India’s economic destiny. The intricacies explored in this comprehensive analysis underline the multifaceted nature of budgetary decisions and their far-reaching implications on the nation’s economic landscape.

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