Summary of Interim Union Budget 2024-25 [PART-A]

While presenting the Interim Union Budget for 2024-2025 in Parliament today, Finance and Corporate Affairs Minister Smt Nirmala Sitharaman announced that the capital expenditure outlay for the next year will be increased by 11.1% to Rs.11,11,111 crore, representing 3.4% of GDP.

She stated that this follows the significant tripling of capital expenditures over the last four years, which has resulted in a huge multiplier effect on economic development and job creation.

According to the First Advance Estimates of National Income for FY 2023-24, presented with the Finance Minister‘s speech, India’s Real GDP is expected to grow at 7.3%. This is also consistent with the RBI’s raised revision of growth expectations for FY2023-24 (at its December 2023 Monetary Policy Committee meeting) from 6.5% to 7%, triggered by strong growth in Q2 FY2023-24.

Indian economy has demonstrated resilience and maintained healthy macro-economic fundamentals, despite global economic challenges. The International Monetary Fund (IMF), in its World Economic Outlook (WEO), October 2023, has revised its growth projection for India for FY2023-24 upwards to 6.3 per cent from 6.1 per cent projected in July 2023.

This indicates growing worldwide confidence in India’s economic power at a time when the global growth forecast for 2023 is steady at 3%.

According to the IMF, India is on track to become the third-largest economy in 2027 (in USD at market exchange rates), and its contribution to global growth is expected to increase by 200 basis points over the next five years. Furthermore, numerous international agencies such as the World Bank, the IMF, the OECD, and the ADB expect India to grow by 6.4%, 6.3%, 6.1%, and 6.7%, respectively, in 2024-25.

The Finance Minister stated that strong growth in economic activity has imparted buoyancy to revenue collections and pointed out that GST collection stood at Rs.1.65 lakh crore in December 2023. This is the seventh time that gross GST revenues have crossed Rs.1.6 lakh crore benchmark.

She said, coming to 2024-25, the total receipts other than borrowings and the total expenditure are estimated at Rs.30.80 and 47.66 lakh crore respectively. The tax receipts are estimated at Rs.26.02 lakh crore.

In a momentous statement, the Finance Minister stated that the policy of fifty-year interest-free loans for capital expenditure to states will be extended this year, with a total outlay of Rs.1.3 lakh crore. This year, the State Government proposed a provision of 75,000 crore rupees as a fifty-year interest-free loan to support the milestone-linked reforms of Viksit Bharat.

Smt Sitharaman’s Budget Speech for 2021-22 aimed to reduce the fiscal deficit to less than 4.5 percent by 2025-26. The fiscal deficit in 2024-25 is expected to be 5.1% of GDP, aligning with this goal.

Similarly, gross and net market borrowings through dated securities are expected to be Rs.14.13 and 11.75 lakh crore, respectively, which are lower than in 2023-24.

The Finance Minister highlighted some of the economy’s bright areas, stating that the revised estimate of total receipts other than borrowings is Rs.27.56 lakh crore, with tax receipts at Rs.23.24 lakh crore. The revised estimate for overall spending is Rs.44.90 lakh crore. Revenue receipts of Rs.30.03 lakh crore are projected to exceed the Budget Estimate, indicating strong economic growth and formalisation.

She announced that the FDI influx during 2014-23 was USD 596 billion, representing a golden era and more than double the inflow from 2005-14.

To encourage sustained foreign investment, we are negotiating bilateral investment treaties with our foreign partners, in the spirit of ‘first develop India’, the Finance Minister continued.

Smt Nirmala Sithraman said, Prime Minister Shri Narendra Modi firmly believes and focused on four major castes. They are, ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’(Farmer). She said, their needs, their aspirations, and their welfare are the government’s highest priority, because the country progresses when it progresses.

Smt Nirmala Sitharaman went on to say that this government’s humanistic and inclusive approach to development is a significant break from the previous method of ‘provisioning up-to-village level’.

In the previous 10 years, development projects have targeted each and every household and individual through ‘housing for all’, ‘hargharjal’, electricity for all, cooking gas for all, bank accounts and financial services for all, in record time, she noted.

The Finance Minister stressed that this Government is working with an approach to development that is all-round, all-pervasive and all-inclusive (सर्वांगीण, सर्वस्पर्शी और सर्वसमावेशी). It covers all castes and people at all levels. She said, “We are working to make India a ‘Viksit Bharat’ by 2047. For achieving that goal, we need to improve people’s capability and empower them”.

She further stated, “Previously, social justice was primarily a political slogan. For our government, social fairness is a viable and necessary governance paradigm.”

The Finance Minister said among thumping desks that the Indian economy has undergone fundamental positive development in the last ten years, and Indians are looking forward to the future with hope and confidence. She went on to say, “Conditions were created for increased job and business prospects. The economy gained new vitality. People began to reap the benefits of development on a large scale. The country gained a renewed sense of purpose and hope.”

The Finance Minister informed that with the pursuit of ‘SabkakaSaath’ in these 10 years, the Government has assisted 25 crore people to get freedom from multi-dimensional poverty and the Government’s efforts are now getting synergized with energy and passion of such empowered people.

She informed that PM Mudra Yojana has sanctioned 43 crore loans aggregating to Rs.22.5 lakh crore for entrepreneurial aspirations. It may be mentioned that thirty crore Mudra Yojana loans have been given to women entrepreneurs.

The Interim Budget contains a number of announcements and strategies indicating directions and development approach for making India Viksit Bharat by 2047.

Making a slew of announcements, Smt Nirmala Sitharaman stated that the government will pay utmost attention to making the eastern region and its people a powerful driver of India’s growth. She also stated that the PM Awas Yojana (Grameen) is close to achieving the target of three crore houses, and that two crore more houses will be built in the next five years to meet the demand caused by an increase in the number of families. Similarly, with rooftop solarization, one crore homes will be able to receive up to 300 units of free electricity each month.

The Pradhan Mantri Kisan Sampada Yojana has benefited 38 lakh farmers and created 10 lakh jobs. Pradhan Mantri Formalisation of Micro-Food Processing Enterprises The Yojana has provided credit linkages to 2.4 lakh SHGs and 60,000 people.

Smt. Nirmala Sitharaman proclaimed a golden era for tech-savvy youth by establishing a corpus of Rs.1 lakh crore with a 50-year interest-free loan. She stated that the corpus will provide long-term funding or refinancing with long maturities and low or zero interest rates. This would also inspire the private sector to significantly raise up research and innovation in the sunrise domains, she added.

Railways will develop three important economic railway corridor programmes: energy, mineral and cement corridors, port connectivity corridors, and high traffic density corridors. Furthermore, forty thousand regular rail bogies will be modified to Vande Bharat standards to improve passenger safety, convenience, and comfort.

In the aviation sector, the number of airports has doubled to 149, and 517 new routes now carry 1.3 crore people. Indian airlines have placed orders for nearly 1000 new aircraft.

Smt Nirmala Sitharaman announced that the government will form a high-powered committee to thoroughly examine the challenges posed by rapid population growth and demographic changes and that the committee will be tasked with making comprehensive recommendations for addressing these challenges in relation to the goal of ‘Viksit Bharat’.

The Finance Minister pointed out that the Prime Minister in his Independence Day address to the nation, in the 75th year of our Republic said, “we commit ourselves to national development, with new inspirations, new consciousness, new resolutions, as the country opens up immense possibilities and opportunities”. It is our ‘KartavyaKaal’.

She went on to say, “Every challenge of the pre-2014 era was overcome through our economic management and our governance and these have placed the country on a resolute path of sustained high growth.”

Smt Nirmala Sitharaman emphasized, “This has been possible through our right policies, true intentions, and appropriate decisions. In the full budget in July, our Government will present a detailed roadmap for our pursuit of ‘Viksit Bharat’.