Finance Minister Nirmala Sitharaman holding budget documents at the North Block in New Delhi on February 1, 2023. | Photo credit: RV Moorthy

On February 1, Finance Minister Nirmala Sitharaman raised the ceiling on personal income tax refunds, distributed rations on small savings and announced one of the largest increases in capital spending in the past. of the past decade as it strode a tightrope in the budget between remaining fiscally prudent and meeting public expectations in the year before the general election.

Ms Sitharaman’s fifth consecutive budget comes at a time when the economy is slowing and there is a need to increase spending in social sectors as well as increase incentives for local manufacturing. The Modi government will seek a third term next year and the BJP will face nine assembly elections this year.

Announcing its last comprehensive budget ahead of the 2024 elections, the NDA government focused on a series of measures that increased capital spending and linked to various priorities including green growth, youth power and inclusive development . This was also accompanied by important tax announcements for the working class, with changes in tax brackets and a clear intention to switch to the new tax regime.