INTERIM BUDGET- 2024-2025
- Budget (Annual financial statement)– Statement of the estimated receipts and expenditure of the Government of India for a specific financial year according to Article 112 of the Indian Constitution.
Article 112 – The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India
- Interim budget– Short term financial statement that allows for the smooth functioning of the government until a new administration can present a full budget for the entire fiscal year.
- It is presented by the outgoing government ahead of the Lok Sabha polls in the Budget session.
- There is no constitutional provisionfor an interim budget.
- The interim Budget includes estimates for government expenditure, revenue, fiscal deficit, and financial performance for a few months, but cannot include major policy announcements.
- Vote on Account – It allows the Lower House to make any grant in advance for the estimated expenditure for part of any financial year by voting and passing such a legislation (Article 116).
- It is valid only for 2 monthsand can be extended up to 4 months.
|Presented on February 1st of each year, outlines the government’s financial roadmap for the entire fiscal year (April 1 to March 31).
|Presented in an election year, typically around February, to keep essential government operations funded until the newly elected government presents its full budget.
|Covers all aspects of government finances, including revenue generation, expenditure allocations and policy annosuncements
|Focusses primarily on maintaining essential spending on ongoing schemes and critical public services until the new government takes charge.
|Major policy pronouncements are made in the annual budget.
|Due to its transitory nature, an interim budget avoids major policy pronouncements or significant changes to tax structures.
|Faces rigorous debate and analysis
|Receives less scrutiny due to its limited scope and temporary nature.
|Usually 2–4 months, but remains valid until the new government presents its full budget.
- Goal –To make India a ‘Viksit Bharat’ by 2047 (Prosperous Bharat in harmony with nature, with modern infrastructure, and providing opportunities for all citizens and all regions to reach their potential)
- The trinity of demography, democracy and diversitybacked by ‘Sabka Prayas’ has the potential to fulfill aspirations of every Indian.
- Guided by the principle ‘Reform, Perform, and Transform’, the Government will take up next generation reforms.
- Moving forward towards the goal of 100 years of independence, ‘Amrit Kaal’ has been named as ‘Kartavya Kaal’.
- Focus – ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’ (Farmer)
- Promotion of Digital Public Infrastructure– Formalised the economy
- Goods and Services Tax– Enabled One Nation, One Market, One Tax
- GIFT IFSC and the unified regulatory authority, IFSCA– Created a robust gateway for global capital and financial services
- Despite the challenges due to COVID, the government is close to achieving the target of 3 crore houses in implementing the PM Awas Yojana (Grameen).
- With the pursuit of ‘Sabka ka Saath’in these 10 years, the Government has assisted 25 crore people to get freedom from multi-dimensional poverty.
- Rooftop solarisation – Through rooftop solarization, 1 crore households will be enabled to obtain up to 300 units free electricity every month.
- India assumed the G20 Presidencyon the 1st of December 2022 from Indonesia and convened the G20 Leaders’ Summit for the first time in the country in 2023.
- The recently announced India-Middle East-Europe Economic Corridoris an economic game changer for India.
- Housing– The government will launch a scheme to help deserving sections of the middle class “living in rented houses, or slums, or chawls and unauthorized colonies” to buy or build their own houses.
- Extra 2 crore houses under Pradhan Mantri Awas Yojna-Graminwill be made in 5 yrs.
- Healthcare – The Government will encourage vaccination for girls in age group of 9 to 14 years for prevention of cervical cancer.
- U-WIN platform for managing immunization and intensified efforts of Mission Indradhanushwill be rolled out throughout the country.
- Healthcare cover under Ayushman Bharatscheme will be extended to all ASHA workers, Anganwadi Workers and Helpers.
- Saksham Anganwadi and Poshan 2.0 to be expedited for improved nutrition delivery, early childhood care and development.
- Agriculture/allied sectors– After the successful adoption of Nano Urea, application of Nano DAP will be expanded in all agro-climatic zones.
- Atmanirbhar Oil Seeds Abhiyanwill be formulated to achieve self-reliance for oil seeds such as mustard, groundnut, sesame, soybean, and sunflower.
- 5 integrated aqua parks will be setup.
- Pradhan Mantri Matsya Sampada Yojana (PMMSY)will be stepped up to enhance aquaculture productivity from existing 3 to 5 tons per hectare, double exports to 1 lakh crore and generate 55 lakh employment opportunities in near future.
- A comprehensive programme for supporting dairy farmers will be formulated on the success of existing schemes such as Rashtriya Gokul Mission, National Livestock Mission,
- Women– The target for Lakhpati Didi which was initially set at 2 crore women has been enhanced to 3 crore women.
- Research and Innovation – A corpus of 1 lakh crorewill be established with 50 year interest free loan to encourage the private sector to scale up research and innovation in sunrise domains (Jai Anusandhan scheme).
- A new scheme will be launched for strengthening deep-tech technologies for defence purposes.
- Infrastructure Development – The capital expenditure outlay for next year is increased by 11.1 % to 11,11,111 crore, 3.4 % of the GDP.
- 3 major economic railway corridor programmes will be implemented under PM Gati Shakti.
- Energy, mineral and cement corridors
- Port connectivity corridors
- High traffic density corridors
- 40,000 normal rail bogies will be converted to the Vande Bharatstandards to enhance safety, convenience and comfort of passengers.
- Expansion of Metro Rail and NaMo Bharatwill be supported in large cities focusing on transit-oriented development.
- India plans to broaden its Production Linked Incentive (PLI)scheme to include toys, leather and footwear, aiming to boost domestic manufacturing and exports.
- Green Energy – To meet the commitment for ‘net-zero’ by 2070,
- Viability gap funding will be provided for harnessing offshore wind energy potential for initial capacity of 1 giga-watt.
- Coal gasification and liquefaction capacity of 100 MT will be set up by 2030.
- Phased mandatory blendingof compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes will be mandated.
- A new scheme of bio-manufacturing and bio-foundrywill be launched to provide environment friendly alternatives such as biodegradable polymers, bio-plastics, bio-pharmaceuticals and bio-agri-inputs.
- For blue economy 2.0, the following schemes will be launched.
- A scheme for restoration and adaptation measures
- Coastal aquaculture and mariculture with integrated and multi-sectoral approach.
- Tourism– States will be encouraged to take up comprehensive development of iconic tourist centres and long-term interest free loans will be provided to States for financing such developments.
- A framework for rating of the centres based on quality of facilities and services will be established.
- State reforms – A provision of 75000 crore rupees as 50 year interest free loan is proposed to support the milestone-linked reforms by the State Governments.
|Revised Estimates 2023-24
|Total receipts other than borrowings
|27.56 lakh crore
|23.24 lakh crore
|44.90 lakh crore
|30.03 lakh crore
|5.8% of GDP
|Budget Estimates 2024-25
|Total receipts other than borrowings
|30.80 lakh crore
|26.02 lakh crore
|47.66 lakh crore
|Estimated fiscal deficit
|5.1% of GDP ( Aims to reduce fiscal deficit below 4.5 % by 2025-26)
In keeping with the convention, no changes were made relating to taxation and same tax rates for direct and indirect taxes including import duties were retained.
- Over the last ten years, the direct tax collections have more than tripled and the return filers swelled to 2.4 times.
- Average processing time of returns has been reduced from 93 days in 2013-14 to a mere 10 days this year.
- Existing provisions –Corporate tax rate was decreased from 30% to 22% for existing domestic companies and to 15% for certain new manufacturing companies.
- No tax liability for taxpayers with income up to Rs. 7 lakh under the new tax regime
- The Interim Budget proposes to withdraw outstanding direct tax demands up to Rs. 25000 pertaining to the period up to financial year 2009-10 and up to Rs. 10,000 for financial years 2010-11 to 2014-15.
- Tax base of GST more than doubled this year.
- The average monthly gross GST collection has almost doubled to 1.66 lakh crore, this year.
- States’ SGST revenue, including compensation released to states, in the post-GST period of 2017-18 to 2022-23, has achieved a buoyancy of 1.22.
Positives in the Budget
- Public investment– A 11% rise in capital expenditure signifies its importance in overall economic growth.
- The government proposes a moderate expansion in public investment and is expected to free up resources for the private sector, preventing “crowding-out” of private investment.
- Due to uncertain global energy supply situation after the war in Ukraine, it seems to have encouraged public sector oil, electricity and coal public sector undertakings to step up investment to improve energy security.
- State’s fiscal health– Extending the 50-year interest-free loans offered to States (with conditionalities) is perhaps a welcome move for growth.
- R & D– A corpus of 1 lakh crore in R&D for the private sector helps boost industrial R&D as India’s R&D expenditure as a ratio of GDP has remained stagnant at 0.8% for decades now.
- Renewable energy– The Budget applauded the recently announced PM Suryodaya Yojana to set up rooftop solar in 1 crore household as India lags behind in tapping the free natural source.
Shortcomings in the Budget
- Allocation– The budgetary allocation for core schemes such as the AMRUT, Smart Cities Mission, PM-POSHAN and MGNREGA saw reduced allocation.
- Social sector –The approach of moving attention away from provision of services has also meant neglect of basic education, health, and nutrition services.
- FDI– There have been more exits by private equity capital from India. Much of FDI has flown into services and only modestly in manufacturing.
- So, the modest FDI hardly adds to the economy’s fixed investment growth.
- Dependence on China –The Budget’s composition display areas of concern. The trade deficit with China has steadily widened accounting for one-third of India’s trade deficit.
- It also seems to ignore potential threats arising from geopolitics or strategic risks posed by dependence on China for critical inputs.
- Non- addressal of major issues– It refuses to address shortcomings such as the lack of employment, wage growth, or the critical deficiencies in sectors such as manufacturing.