Finance Minister Nirmala Sitharaman presented the interim budget on February 1, 2024, as the Narendra Modi government sought re-election in the Lok Sabha elections scheduled for April-June. Sitharaman outlined the government’s financial plans and projections for the coming fiscal year, with a focus on growth and sustainability.
Key highlights of the interim budget:
Expenditure
– Total expenses: The government has forecast an expenditure of Rs 47.65 trillion for FY 2025, up 6 percent from the revised estimate for FY 2024.
– Interest payment: These formed a substantial part: 25 percent of expenditure was spent on interest payments, which amounted to 40 percent of income.
Receipts
– Sales growth: Revenues, excluding loans, were expected to rise 12 percent to Rs 30.8 trillion in FY25, mainly due to a 12 percent increase in tax revenues.
GDP growth
– Nominal GDP: The government expected nominal GDP growth of 10.5 percent for fiscal year 2025, taking into account both real growth and inflation.
Shortages
– Income deficit: Target is 2 percent of GDP, lower than the revised estimate of 2.8 percent in FY24.
– Budget deficit: Set at 5.1 percent of GDP, down from the revised 5.8 percent of GDP in FY24.
New arrangements and allocations
– Economics: The Ministry of Economic Affairs received Rs 70,449 crore for new schemes, which are mainly focused on capital expenditure, which amounts to 7.5 percent of the total capital expenditure.
Tax proposals
– TAX RATES: No changes were made to direct and indirect tax rates.
– Extensive benefits: Direct tax benefits for startups, sovereign wealth funds, pension funds and certain divisions of the International Financial Services Centre (IFSC) have been extended until March 2025.
Policy highlights
– Railways: Launch three major economic initiatives for rail corridors and upgrade 40,000 rail bogies to Vande Bharat standards.
– Housing: Construction of another 20 million houses under the Pradhan Mantri Awas Yojana-Gramin and a new programme to help middle-class families buy or build houses.
– Health: Initiatives include promoting cervical cancer vaccination for girls aged 9 to 14 years, launching the U-WIN platform for vaccination management and extending health coverage under Ayushman Bharat to Accredited Social Health Activist (ASHA) and Anganwadi workers.
– Energy: There are plans to equip 10 million households with solar panels on their roofs by 2030, blend biogas with compressed natural gas/pipeline gas (CNG/PNG), and generate 100 tonnes of coal gasification and liquefaction capacity.
– Environment: Improving the production of electric vehicles and charging infrastructure, introducing e-buses, launching the Blue Economy 2.0 and promoting environmentally friendly alternatives such as biodegradable polymers and bioplastics.
– Agriculture: Promotion of public and private investments in post-harvest activities, expanded application of Nano Diammonium Phosphate (DAP) fertilizer and extension of the PM Matsya Sampada Yojana to improve aquaculture productivity and seafood exports.
Demographics
– High-ranking committee: Establishment of a commission to deal with population growth and demographic issues.
– Research: Establishment of a Rs 1 trillion fund to support private sector research and innovation through low-interest loans.
– Tourism: Encouragement for states to develop and promote tourist centres, with plans to provide long-term interest-free loans for tourism projects.
High expectations for the 2024 Union Budget
Expectations are high as Nirmala Sitharaman is set to present her seventh budget in the Lok Sabha today, the 13th budget of the Modi government since it came to power in 2014.
The budget will not only reflect the achievements of the Modi government over the past decade, but will also lay out a roadmap to transform India into a developed country. Key areas of focus are expected to include reforms in the income tax structure and measures to improve ease of doing business in India.
Congress leader Ajay Rai expressed his expectations for the budget 2024 and stressed the need to control inflation. “Inflation has to be controlled in this budget. The price of garlic is Rs 500 per kg and the prices of vegetables and medicines have gone up. The price of life-saving medicines has gone up. Employment opportunities also have to be created. All these factors have to be worked on.”
Just a day ago, Sitharaman tabled the Economic Survey in Parliament along with a statistical annex. This will be the first full budget of the BJP-led National Democratic Alliance (NDA) government in its third term.
(With input from the agency)
First print: Jul 23, 2024 | 10:51 AM IST