Electoral Cycle and the Union Budget 2023–24

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Electoral Cycle and the Union Budget 2023–24

Some Departures from the Past?

Budget 2023-24

Vol. 58, Issue No. 12, 25 Mar, 2023

Updated on 25 March 2023

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The fiscal deficit and expenditure composition in terms of revenue and capital expenditure in a pre-election budget capture the net effect of the compulsion of reducing taxes and levies, and spending more, particularly on welfare measures, partly to attract votes. An analysis of the 2023–24 budget before the 2024 Lok Sabha elections shows that the current National Democratic Alliance government has managed such compulsions better than not only the two previous United Progressive Alliance governments but even the preceding NDA government.

The five-year term of the 17th Lok Sabha is coming to an end by June 2024. Before that, elections will have to be held to constitute the 18th Lok Sabha. Before such an election, on 1 February 2024, there will be only an interim Union Budget for 2024–25 to carry on the government’s business until a new government takes over in mid-2024. The Union Budget for 2023–24, presented on 1 February 2023, is a pre-election budget. It is the last regular budget of the fifth Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government.¹ Every year, elections keep happening in India in some state, municipality, or panchayat, and every union budget can be christened as a pre-election budget. But for an incumbent union government, the stakes are significantly higher when it is the Lok Sabha election that is around the corner.

There was, and is, a pre-election budget before every Lok Sabha election. But analysis of such pre-election budgets during the decade of 1989–99, when the Lok Sabha was dissolved five times, may not have much significance. Such analysis can be done for the period after the decade-long political churning in India ended in 1999, and clear mandates to rule India uninterrupted for the full term of five years started emerging for one political party or an alliance of such parties. The BJP-led NDA ruled India between 1999 and 2004, between 2014 and 2019, and is currently ruling from 2019. The Indian National Congress (INC)-led United Progressive Alliance (UPA) ruled from 2004 to 2009 and from 2009 to 2014. Both the NDA and the UPA governments got two opportunities—the NDA in 2003–04 and 2018–19 and the UPA in 2008–09, and 2013–14—to present their pre-election full budgets. The NDA got a third chance when it presented its pre-election full budget on 1 February 2023.