The economy of the country will now be strengthened with a more comprehensive GDP that will be based on Governance, Development and Performance. This redefining of GDP came from none other than the Finance Minister of the country Ms. Nirmala Sitharaman as she presented her sixth straight and last interim budget of this government for the fiscal year 2024-25. With this budget, Ms. Sitharaman equalled the record of Former Finance Minister Late Morarji Desai in presenting the no. of budgets. The Union Budget 2024 was infact a Vote on Account ahead of the Loksabha elections scheduled ahead of the end of the term of the present government in May 2024. The interim budget functions as a provisional financial plan during an election year, addressing immediate financial needs until a new government is in place. Usually no significant announcements or reforms are presented in the Vote on Account and these are done in the subsequent full budget that is to be presented by the new government.
While announcing the budget, Ms. Sitharaman also mentioned the massive transformation in the economy in the last ten years as a result of the various structural reforms and pro-poor programmes carried out by the present government. The last ten years have come up with monumental achievements. The participation of women in Higher Education Institutes (HEIs) has increased by 28 per cent. Over rupees 22 lakh crore loans under MUDRA have been granted in the last ten years. Rupees 30 crore MUDRA Loans have been provided to women entrepreneurs. Under skill India Mission 1.4 crore youths have been given skill training and have been made job ready. In the last 10 years 25 crore peoples have been lifted out of poverty. Credit assistance has been provided to 78 lakh street vendors under PM Street Vendor’s Atma Nirbhar Nidhi (PM SVANidhi). The FM also made it clear that the next generation of reforms will be carried out in consultation with state governments and the eastern region of the country will be drivers of country’s economic growth.
While highlighting the importance of a unified tax system, the Finance Minister said that the GST has reduced the compliance burden on trade and industry. A recent survey concluded that 94% of the industry leaders view the transition to GST as largely positive. The number of tax filers swelled by 2.4 times, Sitharaman said. The direct tax collection has trebled since 2014. In 2024-25, the tax receipts are projected at Rs 26.02 lakh crore. Sitharaman said that the government would spend rupees 11.1 lakh crore as capital expenditure in the next fiscal which is about 11% higher when compared to allocation of the current year. She further said that the crisis of yesteryears has been overcome and the economy now is back on the path of high sustained growth and that with the dedicated efforts and good intention the goal of Viksit Bharat will be achieved within the deadline.
Fiscal Deficit
The fiscal deficit i.e. the gap between government’s revenue and expenses is at 5.8% of the GDP for 2023-24 (FY24). Fiscal deficit in FY25 is expected to be 5.1% of GDP. The target is to reduce the fiscal deficit to below 4.5% of the GDP in 2025-26 (FY26).
Tax proposals: Due to Vote on Account, this budget has proposed not to make any changes in the taxation rates prevailing in the country for direct as well as indirect taxes including import duties. Certain tax exemptions like for Startups and International Financial Services Centre (IFSC) units which are expiring have been extended till March 31, 2025.
Reforms in States for Viksit Bharat
An amount of rupees 75,000 crore has been proposed as 50 year interest free loan for milestone linked reform by various states.
Societal Changes
A high powered committee will be set up to review challenges arising from fast population growth and demographic changes.
Rural Housing and Renewable energy
As many as two crore more houses will be built under Primeminister Awas Yojana (G). Govt. will also go for viability gap funding for wind energy. Coal gasification and liquefaction capacity will be set up. There will be phased blending of CNG, PNG and compressed biogas. The government will also provide for financial assistance for procurement of biogas aggregation machinery. Through roof-top solarization, 1 crore households will be enabled to obtain up to 300 units of free electricity every month.
Encouraging Sunrise Technologies
For tech-savvy youth, a corpus of Rs 1 lakh crore will be established with 50-year interest free loan provided. The corpus will provide long term financing and re-financing with long tenures at low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains. A new scheme will be launched for strengthening deep tech technology for defence purposes and expediting Atmanirbharta.
Agriculture
In the agriculture sector budget 2024 aims at promoting investment in post-harvest activity by both private and public sector support. More efforts will be put in to control Foot and mouth disease. It also focuses on empowerment of Dairy farmers’. Five integrated Aqua Park will be set up. Government also will launch Blue Economy 2.0 to promote aquaculture. The Primeminister Matsaya Sampada Yojana will be stepped up to enhance productivity and production of aquaculture, double exports and generate employment opportunities for the youths. Application of Nano DAP will be expanded in all agro-climatic zones in the country.
Health
Health care facilities under Ayushman Bharat will be extended to cover all ASHA and Anganwadi workers. More district level hospitals will be setup. 9 to 14 years old girls will be vaccinated against cervical cancer. Saksham Anganwadi and Poshan 2.0 to be expedited for improved nutrition delivery, early childhood care and development.
Air Connectivity
To promote air connectivity across different regions in the country, 517 new routes to be launched under Udaan Scheme.
Tourism
Interest-free loans will be provided to states to promote tourism. Government will also allocate funds for development of tourism in Lakshadweep.
Railways
In a bid to improve operations of passenger trains, the FM announced three major economic railway corridor programmes viz energy, mineral and cement corridors, port connectivity corridors and high traffic density corridors. These corridors will improve logistics efficiency and reduce cost. The resultant decongestion of the high-traffic corridors will also help in improving operations of passenger trains, resulting in safety and higher travel speed for passengers besides reducing logistics cost. As many as 40,000 normal train bogies will be converted into high speed Vande Bharat bogies.
Reiterating Hon’ble Prime Minister of the country Sh. Narendra Modi’s resolve to work for four castes in India, the Finance Minister said that the needs and aspirations of the four categories of peoples the poor, women, youth and farmers’ will guide country’s growth. Hon’ble Finance Minister had listed inclusive growth and social justice as the priorities of the government. Hopefully next five years will witness unprecedented growth based on the philosophy of Antyodaya i. e rise and development of the last person in the society.
(The author writes on agriculture and social issues, can be reached at: [email protected])
