Budget 2024: Will coalition government affect 'Modinomics 3.0'?

The upcoming budget will be the first for 'Modi 3.0', with the NDA-led government looking to hit the sweet spot between populism and fiscal prudence. 

However, that is not the only challenge the government will have to mount. A weaker mandate in the general elections for the BJP led to the formation of a coalition government, which will have a saying in the upcoming budget. 

Telugu Desam Party (TDP) chief N Chandrababu Naidu has asked for a financial package of nearly Rs 1.5 lakh crore while Chief Minister and Janata Dal (United) leader Nitish Kumar has put forth his demand for a special status for Bihar along with compensation for floods and various infrastructure projects. 

The demands from both these leaders coupled together could prove to be financial strain in Budget 2024 for the government. 

Finance Minister Nirmala Sitharaman is expected to prioritise significant capital expenditure in the infrastructure sector, incentives for manufacturing and MSMEs, income tax relief for the middle class, and various benefits for women and farmers. Additionally, measures to strengthen the IT and healthcare sectors will be considered. 

While all of this will require major budgetary allocation, the demands from the coalition mainstays also cannot be overlooked.