A Comprehensive Analysis of Interim Budget 2024-25 Unveiled by Finance Minister Nirmala Sitharaman
Introduction and Overview
- Finance Minister Nirmala Sitharaman presents the interim budget for the fiscal year 2024-25 on 1st February 2024. This budget serves as a financial provision for the government till the full budget is passed post the general elections.
The Budget Breakdown
1. Key Features of the Budget
- Government expenditure: Estimated at Rs 47,65,768 crore in 2024-25, reflecting a 6% increase compared to the revised estimate of 2023-24.
- Non-borrowing receipts: Expected to reach Rs 30,80,274 crore in 2024-25, marking a 12% rise from the revised estimate of 2023-24.
- GDP: A nominal GDP growth rate of 10.5% is predicted for 2024-25.
- Fiscal and Revenue Deficits: Both targeting a lower percentage compared to 2023-24; 5.1% of GDP and 2% of GDP, respectively.
- New Schemes: Rs 70,449 crore is allocated for new economic schemes, waiting for specification.
2. Tax Proposals in the Finance Bill
- Tax rates are unchanged and tax benefits extended for certain entities till March 2025.
Policy Highlights in Various Sectors
- Railways: Major economic initiatives concerning energy, minerals, cement, port connectivity, and high traffic density corridors.
- Housing: Two crore additional homes under Pradhan Mantri Awas Yojana-Gramin over the next five years.
- Health: Nationwide immunisation management using U-WIN; extended health coverage for ASHA and Anganwadi workers under Ayushman Bharat scheme.
- Energy: One crore households to get solar rooftop installations; a phased plan for compressed biogas blending in PNG and CNG; installation of coal gasification and liquefaction capacity by 2030.
- Environment: Measures to boost EV manufacturing and charging infrastructure; Blue Economy 2.0 scheme launch; a new scheme promoting biodegradable polymers, bio-plastics, and bio-pharmaceuticals.
- Agriculture: Promoting investment in post-harvest activities, expanding Nano DAP fertiliser use, supporting dairy farmers, enhancing the PM Matsya Sampada Yojana.
- Demography: High-powered committee to address population and demographic change-related challenges.
- Research: A corpus of Rs. One lakh crore to stimulate private sector involvement in research and innovation.
Comparison of Fiscal Estimates for 2024-25 and Revised Estimates for 2023-24
- Expenditure: 6% increase in the total projected expenditure; Capital expenditure surging by 16.9%, while revenue expenditure growing by 3.2%.
- Receipts: Estimated receipts mark an 11.8% increase.
- Transfer to States: The central government aims to transfer Rs 22,74,541 crore to states and UTs, an 8.4% rise.
- Deficits: The fiscal and revenue deficit targets are lesser than their respective figures for 2023-24.
- Disinvestment: Down from the budget target of 2023-24 and marking the fourth consecutive year of reduction in disinvestment targets.
Fiscal Responsibility and Budget Management (FRBM) Targets
- FRBM Act, 2003 mandates the central government to reduce its outstanding debt, revenue deficit, and fiscal deficit.
- In 2024-25, the estimated revenue deficit is lesser than that of 2023-24, thanks to a 11% increase in revenue receipts.
- Outstanding liabilities, which had been increasing since 2020, are expected to reach 57% of GDP in 2024-25.
- Interest payments are estimated to constitute 40% of revenue receipts in 2024-25, highlighting the significant share of revenue used for debt servicing.
Sector-wise Expenditure Highlights for 2024-25
- Defence: Rs 6,21,541 crore, the highest allocation, marked a marginal decrease of 0.4%.
- Ministries of Road Transport and Highways, Railways, and Consumer Affairs, Food and Public Distribution: Received significant allocations.
- Department of Economic Affairs: Saw a significant allocation for new schemes.
- Communications Ministry: An increase of 11.8% is expected in allocation for 2024-25, primarily due to capital infusion into BSNL.
This comprehensive analysis of the Interim Budget 2024-25 provides valuable insights into India's changing economic landscape and governmental priorities. A growing focus on health, housing, and energy demonstrates a shift towards human development and sustainable practices, with continuing emphasis on defence and infrastructure development.