The government will likely increase the amount of money transferred under its flagship direct benefit transfer scheme – Pradhan Mantri Kisan Samman Nidhi or PM-Kisan – by about 50% to ₹9,000 per year from the current ₹6,000, said some of the economists polled.
A new iteration of the housing scheme and a push for jobs is also expected in the upcoming interim budget, the ET poll of economists indicated.
Six of the 10 economists polled by ET say higher allocation for PM-Kisan is one of the three social sector interventions expected.
Six economists also chose the housing scheme, the PM-Awas Yojana, as a likely focus area in the interim budget.
“The government could increase the support under the (PM-Kisan) scheme anywhere between ₹8,000 and ₹10,000,” said Sakshi Gupta, principal economist at HDFC Bank.PM-Kisan had an outlay of ₹60,000 crore in the previous budget.
QuantEco’s Yuvika Singhal pegged the number at ₹9,000 a year for PM-Kisan, while noting that the rural housing scheme, PMAY-Gramin, may undergo a second iteration.”The government may have greater focus on tech to maximise social spending outreach,” Singhal added.
Gupta of HDFC Bank said the government could also focus on support for women in the interim budget besides higher allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
While the government had scaled down MGNREGS allocation in the last budget to ₹60,000 crore, it cleared an extra ₹14,524 crore in December 2023 as part of its first batch of supplementary demands for grants for FY24.
“Agriculture-focused support, via an extension of the income transfer scheme, support via fertiliser subsidies, higher agri credit target outlay, crop insurance and increase in funding towards the rural employment scheme could be expected,” said Radhika Rao, senior economist, DBS Group Research.
Rahul Bajoria, MD & head of EM Asia (ex-China) economics at Barclays, said the government may offer enhanced incentives for job creation, particularly in labour-intensive PLI sectors. He said another intervention could be social security for unorganised sector workers.
However, economists noted that the budget will still push for capital expenditure, as private sector investment is yet to pick up across sectors, though the increase may be less than the near 35% rise in the current fiscal.
“The budget will have to do a fine balancing act on providing a thrust to capex as also meeting the social requirements under the realm of walking on the fiscal prudence path. Hence a trend growth in expenditure can be expected on the social side while capex could go up by a slightly higher rate,” said Madan Sabnavis, chief economist, Bank of Baroda.
The ET poll put the median capital expenditure target at ₹11 lakh crore for FY25, with Bank of Baroda expecting the government to peg such asset-creating spending at ₹11.8 lakh crore in the upcoming budget.
The capital expenditure outlay for FY24 is ₹10 lakh crore.
The government is likely to keep to its fiscal glide path, with the fiscal deficit expected to be set at 5.3% of GDP in FY25. The government aims to reduce the fiscal deficit to 4.5% of GDP in FY26.