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‘Interim’ only in name, an Election Budget in offing; may leave a massive burden for next govt

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‘Interim’ only in name, an Election Budget in offing; may leave a massive burden for next govt

[vc_row][vc_column][vc_column_text]What many have been speculating has been given added credence by Finance Minister Arun Jaitley: that the interim budget – an outgoing government presents only a vote on account rather than a full-fledged budget – would be much more than that.

It would be an Election Budget and it may make the previous budgets under Narendra Modi government look like interim budgets. The measures planned by the government are likely to leave the successor government with a bill of over Rs 1 lakh crore, according to a report in The Economic Times (ET).

Speaking at CNBC-TV18’s Indian Business Leader Awards on Thursday, Jan 17, Jaitley, via video conference, said the government could break with convention and make the February 1 exercise more significant than a vote on account.

There is speculation that the government is studying various options, including a cash handout for farmers, to ease their distress and to shore up popular support before the national election that’s due by May. The government has already exceeded its budget deficit targets in October.

Jaitley, while dismissing fears that he is under pressure to present a populist budget after the recent election debacle in three states and ahead of general elections in April-May, ended up confirming the government’s worry and nervousness.

Jaitley said: “The NDA (National Democratic Alliance) government had been in this game for far too long to have nervousness about the budget. We are confident and proud of our performance over the last five years. The NDA government has succeeded in restoring the credibility of the economy and its decision making process over last few years”

In a regime that tends to equate ‘nation’ and ‘nationalism’ with itself, Jaitley said, “Convention has always been that election year Budget is an interim Budget. The larger interest of the nation dictates what will be a part of the interim Budget.”

“If we look at the big picture there have been successes that we have seen in the last few years. There have also been challenges. Therefore, without getting into the specifics, because that would really be disclosing the mind with which we are working, some of those challenges cannot afford to wait,” Jaitley said.

The government has recently announced a series of measures to try to win over farmers, small business owners and the less well-off, after the BJP suffered setbacks in state elections and with a general election due in months.

The measures are likely to be a drain on finances when Modi government is trying to stick to a decade-low fiscal deficit target of 3.3 per cent of the gross domestic product (GDP).

It has, however, promised even more perks ahead of the general election due by May.

“They will be for development, they will be for transformation,” Union Law Minister Ravi Shankar Prasad had said in Parliament, saying people should more “sixes during the slog overs”. Translated, it means more inducements for the electorate when elections are near.

Media reports suggest that the Centre is considering various options to address the agricultural distress in the country, one of them is cash handout for farmers. The deliberation over this began after the BJP was voted out in three key state elections in December.

If the government is planning to extend any relief to the farmers, it will impact India’s fiscal deficit which has already reached 114.8 percent of the budgeted target in November. Experts say that the government may not be able to stick to its deficit target this year.

In recent weeks, there has also been buzz of tax cuts for the middle class and other measures in the government’s economic statement ahead of Lok Sabha polls.

The FM said that the government will try to stick to its path of fiscal prudence, but he also added that in “unusual situations”, a deviation from the fiscal consolidation path might be required, which was understood by the markets and analysts.

Talking about the urgent need to uplift the farm sector, Jaitley said, “Whether it is a situation like a natural calamity or a drought or stress in a particular sector — these are all areas which cannot be considered any kind of populist expenditure. Markets will never understand if you act for the sake of populism,” he said. “But if it is in the larger interest because of a compelling situation that develops, I think then it is a rational, logical thing, which markets will also understand,” he added.

Asked on a reduction in interest rates amid slowing inflation, Jaitley suggested there was need for RBI to pare policy rates without making an explicit comment. “We can’t have real interest rates (after budgeting for inflation) higher than anywhere in the world,” he said, adding that the central bank has begun consultations with stakeholders.

What Jaitley said needs to be seen in context of statements of Ravi Shankar Prasad and some others, and the Modi government may make a short-term gain politically but may be disastrous for the economy.

A report in the ET said the vote-catching measures planned by Modi as he braces for a difficult general election may cost more than Rs 1 lakh crore which would have to be borne by the government that will take charge after the election due by May.

The spending is also likely to delay plans to reduce the government’s budget deficit, a key indicator of the nation’s economic health.

Jaitley talked of the need for fiscal prudence but kept an escape route open for “unusual situations”. The BJP’s economic affairs spokesman, Gopal Krishna Agarwal, told Reuters this week that the party does not consider the finance ministry’s plan to keep the fiscal deficit to 3.3 percent of gross domestic product in the current April-March fiscal year as “sacrosanct”.

“Addressing farmer distress is the most important thing,” Agarwal told Reuters. “You need an expansionary policy. You chase growth in the economy, you do not chase these parameters like fiscal deficit.”[/vc_column_text][/vc_column][/vc_row]

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Punjab Congress faction games hold up who will lead party as poll approaches

The Congress leadership is expected to finalize the new Punjab Congress chief soon as factions oppose Amarinder Singh Raja Warring continuance as chief.

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The Congress leadership is likely to decide the name of a new Punjab Pradesh Congress Comittee (PPCC) president in light of the growing factional differences emerging within the party state unit.

The decision by party president Mallikarjun Kharge on choosing the head of the state unit is likely to be finalized after he takes note of other senior leaders’ opinions on the matter, as differences over the continuation of Amarinder Singh Raja Warring as PPCC president has led to former Chief Minister Charanjit Singh Channi pitching his hat in the ring.

The leadership crisis has reflected the diverging interests of opposing factions in the Punjab Congress. Channi has the backing of several party leaders including Bharat Bhushan Ashu, Gurpreet Singh Kangar, Darshan Singh Brar, and Nazar Singh Manshahia, among other supporters of Channi, while another faction is supporting incumbent chief Warring.

The Congress needs to stem the crisis soon since the state is headed for elections next year as the term of the Bhagwant Mann-led Aam Aadmi Party government winds down. Many in the party have said that having a widely accepted state leader can strengthen the organizational structure.

The delay in decision-making has caused speculation with some senior leaders meeting BJP heavyweights in Delhi. Though these leaders have dismissed any rumours of switching sides, the strain among the factions is telling on party unity. But given the way several Rajya Sabha MPs of the Aam Aadmi Party switched to the BJP, nothing can be ruled out as election fever picks up.

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Congress MP Manish Tewari says terror must end before India-Pakistan dialogue resumes

Congress MP Manish Tewari has questioned calls to restart India-Pakistan dialogue, arguing that meaningful talks cannot resume until Pakistan takes verifiable action against terrorism.

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Congress MP says decades of peace initiatives have repeatedly been followed by terror attacks and calls for verifiable action against terrorism before any engagement

Congress MP Manish Tewari has questioned renewed calls to resume dialogue between India and Pakistan, saying any discussion with Islamabad must first address the issue of cross-border terrorism. Responding to an appeal by 117 eminent personalities from both countries seeking the restoration of diplomatic engagement, Tewari asked whether such talks could be meaningful without concrete action against terror infrastructure.

Speaking on Friday, the Congress leader said successive Indian governments had consistently attempted to improve relations with Pakistan, but those efforts were repeatedly undermined by terrorist attacks.

According to Tewari, governments led by P.V. Narasimha Rao, H.D. Deve Gowda, I.K. Gujral, Atal Bihari Vajpayee, Manmohan Singh and Prime Minister Narendra Modi all pursued dialogue with Pakistan through formal negotiations or backchannel diplomacy. However, he claimed that each attempt was followed by acts of terrorism.

Calls for proof of dismantling terror infrastructure

Tewari said the key issue was whether Pakistan had provided any verifiable assurance that it had dismantled its terror infrastructure.

Referring to former Pakistan President Pervez Musharraf, he said a public commitment had been made after the Parliament attack to act against terrorism, but the assurance was later withdrawn. He added that similar commitments made during the tenures of former Prime Ministers Manmohan Singh and Narendra Modi also failed to produce lasting results.

Questioning the appeal for renewed engagement, Tewari said those advocating talks should clarify what specific issues they intended to discuss while the threat of terrorism remained unresolved.

References Pahalgam terror attack and Indus Waters Treaty

The Congress MP also referred to the Pahalgam terror attack in April 2025, saying it further reinforced India’s concerns regarding terrorism.

He noted that India’s position became even more firm following the attack, pointing to the suspension of the Indus Waters Treaty as part of the government’s response.

Commenting on the timing of the letter seeking renewed dialogue, Tewari said India had consistently maintained that terrorism and bilateral talks could not proceed simultaneously. He also reiterated the government’s position that it would not differentiate between terrorists and those responsible for directing such attacks.

Peace remains desirable, but security comes first

While acknowledging that millions of people across South Asia aspire for lasting peace, Tewari argued that meaningful dialogue was not possible as long as terrorism remained a continuing threat.

He said India must first receive credible assurances from Pakistan, beginning with an end to the export of terrorism, before considering any resumption of diplomatic engagement.

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TVK alleges Rs 35 crore MLA bribery bid as Tamil Nadu political row escalates

Allegations of a Rs 35 crore bribery offer to a TVK MLA and an FIR against Senthil Balaji’s brother have intensified political tensions in Tamil Nadu, with the TVK, DMK and AIADMK trading accusations.

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The alleged attempt to destabilise the Vijay-led TVK government has triggered a major political confrontation in Tamil Nadu, with the ruling alliance and the opposition accusing each other of engaging in horse-trading and attempts to influence legislators.

The controversy intensified after Chennai Police arrested three people on Wednesday following a complaint by a TVK MLA, who alleged that he was offered ₹35 crore by representatives of a consultancy firm in exchange for supporting a move against the Assembly Speaker. According to the allegations, one of those arrested is reportedly associated with DMK MLA Senthil Balaji and his brother, Ashok.

An FIR has also been registered against Ashok, the brother of Senthil Balaji, over allegations that he attempted to bribe TVK MLA N. Elaiyaraja.

TVK accuses DMK of targeting its MLAs

TVK alleged that the DMK has been attempting to lure its legislators for several weeks in an effort to destabilise the government.

Tamil Nadu minister and senior TVK leader CTR Nirmal Kumar claimed that several TVK MLAs, along with legislators from alliance partners, had been approached over the past 40 days. He alleged that the party had now been “caught red-handed” after the police action and accused the DMK of trying to purchase the support of a TVK MLA for ₹35 crore.

Nirmal Kumar also alleged that a close associate of Senthil Balaji had threatened a TVK legislator and further claimed that former chief minister MK Stalin and Leader of Opposition Udhayanidhi were attempting to create a political crisis. He rejected allegations that the TVK itself was involved in horse-trading, asserting that the ruling alliance remained secure with the support of its partners.

According to the allegations cited by agencies, the purported plan involved securing the simultaneous resignation of 15 TVK MLAs to bring down the Vijay-led government.

Opposition rejects allegations

The DMK dismissed the accusations, alleging that the Vijay-led government was trying to divert attention from its own shortcomings.

DMK leader TKS Elangovan said the government had failed to fulfil its promises and claimed that the TVK alliance itself was engaged in horse-trading. He questioned the allegation that the DMK would seek to engineer political instability under the present circumstances.

The AIADMK also criticised the ruling party, accusing it of attracting legislators from rival parties while questioning its commitment to public welfare. AIADMK chief Edappadi K. Palaniswami said that political manoeuvring and shifting alliances had overshadowed governance.

Alliance partners support TVK government

The TVK’s alliance partners backed the government during the controversy.

Congress MP Praveen Chakravarty questioned why the DMK was allegedly seeking to bring down the government instead of remaining in the opposition, asking why it was in such a hurry to return to power.

VCK leader SS Balaji also reiterated his party’s support for the TVK government for its full five-year term. While stating that he was not aware of the specific allegations regarding attempts to poach legislators, he said that encouraging MLAs to resign was not a healthy democratic practice and reaffirmed the alliance’s commitment to the government.

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