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DAILY NEWS ANALYSIS
01 February, 2024
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Union Budget 2024-25: Highlights –Interim Budget
A budget is a forecast of the government’s revenue and expenses for a future period, typically the upcoming financial year. The Union Budget gives a detailed account of the government's finances over the previous fiscal year, summarises new tax proposals for the upcoming fiscal year, and estimates revenue and expenditure for the next fiscal year.
The Union Budget accounts for the government's finances during the fiscal year from April 1 to March 31. The first Budget in pre-independent India was presented in 1860 by James Wilson of the British Indian Government. After independence, India's first Budget was presented in 1947 by Finance Minister RK Shanmukham Chetty.
Union Finance Minister Nirmal Sitharaman presented the budget for Financial Year 2024-25 on February 1.
Interim Budget
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Full Budget and Interim Budget
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Union Budget?
The Union Budget is the annual financial statement of the Union Government of India that is presented every year on the 1st of February by the Finance Minister (FM) in the Lok Sabha.
Constitutional Provisions Related to India's Union Budget
Article 266 All revenue receipts generated by the Government of India shall be credited to the Consolidated Fund of India.
Revenue raised through provident fund, Postal insurance, etc, shall be credited to the Public Account of India.
Article 267 A Contingency Fund of India has to be set up by the Parliament to meet unexpected or unforeseen expenditures.
Objectives of Union Budget
The Union Budget lies at the foundation of India's economic system and is extremely crucial for the economy's functioning. The Union Budget aims to achieve several key objectives:
History and Evolution of Budget in India
Process of Union Budget
Types of Budgets
Governments have three main types of budgets - balanced, surplus and deficit. A few other types of budgets exist, as explained below:
Type of Budget |
Description |
Balanced Budget |
- A budget where the government’s expected revenue for the financial year equals its expended expenditure. |
Deficit Budget |
- A budget where the government’s expected spending exceeds expected revenue for the financial year. - The deficit is usually covered by borrowing or using a reserve surplus. |
Surplus Budget |
- A budget where the government’s predicted income or revenue exceeds planned expenditures. - It can be used to lower aggregate demand and reduce inflation. |
Zero-Based Budget |
- An approach to planning and preparing the budget from scratch, or 'zero bases’. - It is a systematic cost management process that considers the efficient allocation of income to fixed expenditures, variable expenses, and savings. |
Gender Budget |
- A process of examining the budget of a government or other organisation to assess the extent to which it promotes gender equality. - It is used to identify and track the allocation of resources for women, men, and gender-related issues. |
Iconic Budgets
Over the years, budgets have been crucial in catalysing structural reforms and shaping India's economic progress. Some iconic budgets that significantly impacted India are:
2024 – Interim Budget highlight
With the ‘mantra’ of ‘Sabka Saath, Sabka Vikas, and Sabka Vishwas’ and the whole of nation approach of “Sabka Prayas”, the Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Interim Union Budget 2024-25 in Parliament. The key highlights of the Budget are as follows: Part A
Social Justice
· Prime Minister to focus on upliftment of four major castes, that is, ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’(Farmer). ‘Garib Kalyan, Desh ka Kalyan’
· Government assisted 25 crore people out of multi-dimensional poverty in last 10 years.
· DBT of Rs. 34 lakh crore using PM-Jan Dhan accounts led to savings of Rs. 2.7 lakh crore for the Government.
· PM-SVANidhi provided credit assistance to 78 lakh street vendors. 2.3 lakh have received credit for the third time.
· PM-JANMAN Yojana to aid the development of particularly vulnerable tribal groups (PVTG).
· PM-Vishwakarma Yojana provides end-to-end support to artisans and crafts people engaged in 18 trades.
Welfare of ‘Annadata’
· PM-KISAN SAMMAN Yojana provided financial assistance to 11.8 crore farmers.
· Under PM Fasal BimaYojana, crop insurance is given to 4 crore farmers
· Electronic National Agriculture Market (e-NAM) integrated 1361 mandis, providing services to 1.8 crore farmers with trading volume of Rs. 3 lakh crore.
Momentum for Nari Shakti
· 30 crore Mudra Yojana loans given to women entrepreneurs.
· Female enrolment in higher education gone up by 28%.
· In STEM courses, girls and women constitute 43% of enrolment, one of the highest in the world.
· Over 70% houses under PM Awas Yojana given to women from rural areas. PM Awas Yojana (Grameen) · Despite COVID challenges, the target of three crore houses under PM Awas Yojana (Grameen) will be achieved soon.
· Two crore more houses to be taken up in the next five years.
Rooftop solarization and muft bijli
· 1 crore households to obtain 300 units free electricity every month through rooftop solarization.
· Each household is expected to save Rs.15000 to Rs.18000 annually.
Ayushman Bharat
· Healthcare cover under Ayushman Bharat scheme to be extended to all ASHA workers, Anganwadi Workers and Helpers.
Agriculture and food processing
· Pradhan Mantri Kisan Sampada Yojana has benefitted 38 lakh farmers and generated 10 lakh employment. · Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana has assisted 2.4 lakh SHGs and 60000 individuals with credit linkages.
Pradhan Mantri Kisan Sampada Yojana has benefitted 38 lakh farmers and generated 10 lakh employment.
Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana has assisted 2.4 lakh SHGs and sixty thousand individuals with credit linkages. Other schemes are complementing the efforts for reducing postharvest losses, and improving productivity and incomes.
For ensuring faster growth of the sector, Government will further promote private and public investment in post-harvest activities including aggregation, modern storage, efficient supply chains, primary and secondary processing and marketing and branding, said Sitharaman.
Research and Innovation for catalyzing growth, employment and development
· A corpus of Rs.1 lakh crore to be established with fifty-year interest free loan to provide long-term financing or refinancing with long tenors and low or nil interest rates.
· A new scheme to be launched for strengthening deep-tech technologies for defence purposes and expediting ‘atmanirbharta’.
Infrastructure
· Capital expenditure outlay for Infrastructure development and employment generation to be increased by 11.1 per cent to Rs.11,11,111 crore, that will be 3.4 per cent of the GDP.
Railways
· 3 major economic railway corridor programmes identified under the PM Gati Shakti to be implemented to improve logistics efficiency and reduce cost o Energy, mineral and cement corridors o Port connectivity corridors o High traffic density corridors
· Forty thousand normal rail bogies to be converted to Vande Bharat standards.
Aviation Sector
· Number of airports in the country doubled to 149.
· Five hundred and seventeen new routes are carrying 1.3 crore passengers.
· Indian carriers have placed orders for over 1000 new aircrafts.
Green Energy
· Coal gasification and liquefaction capacity of 100 MT to be set up by 2030.
· Phased mandatory blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes to be mandated.
Tourism sector
· States to be encouraged to take up comprehensive development of iconic tourist centres including their branding and marketing at global scale.
· Framework for rating of the tourist centres based on quality of facilities and services to be established.
· Long-term interest free loans to be provided to States for financing such development on matching basis.
Investments
· FDI inflow during 2014-23 of USD 596 billion was twice of the inflow during 2005-14. Reforms in the States for ‘Viksit Bharat’
· A provision of Rs.75,000 crore rupees as fifty-year interest free loan is proposed to support milestone-linked reforms by the State Governments.
Revised Estimates (RE) 2023-24
· RE of the total receipts other than borrowings is Rs.27.56 lakh crore, of which the tax receipts are Rs.23.24 lakh crore.
· RE of the total expenditure is Rs.44.90 lakh crore.
· Revenue receipts at Rs.30.03 lakh crore are expected to be higher than the Budget Estimate, reflecting strong growth momentum and formalization in the economy.
· RE of the fiscal deficit is 5.8 per cent of GDP for 2023-24.
Budget Estimates 2024-25
· Total receipts other than borrowings and the total expenditure are estimated at Rs.30.80 and Rs.47.66 lakh crore respectively.
· Tax receipts are estimated at Rs.26.02 lakh crore.
· Scheme of fifty-year interest free loan for capital expenditure to states to be continued this year with total outlay of Rs.1.3 lakh crore.
· Fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP
· Gross and net market borrowings through dated securities during 2024-25 are estimated at Rs.14.13 and Rs.11.75 lakh crore respectively.
It has provisions for a huge capital expenditure of ?11.11 lakh crore while keeping the fiscal deficit under control. Macroeconomic takeaways from Interim Budget
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Here’s a list of money allocated to specific ministries:
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Towards meeting the commitment for ‘net-zero’ by 2070, the following measures will be taken:
Here are key announcements made in the Budget speech by FM Nirmala Sitharman on infrastructure development.
- Infrastructure outlay increased by 11.1% to ?11.11 lakh crore
- 50-year interest-free loans to state governments extended for another year under Gati Shakti master plan
- Three major economic railway corridor programmes will be implemented. These are: (1) energy, mineral and cement corridors, (2) port connectivity corridors, and (3) high traffic density corridors.
- 40,000 normal rail bogies will be converted to the Vande Bharat standards to enhance safety, convenience and comfort of passengers.
- NAMO trains and metro rail services will be added in more cities
The government will formulate a comprehensive programme for supporting dairy farmers.
Efforts are already on to control foot and mouth disease, said FM Sitharaman.
The programme will be built on the success of existing schemes such Rashtriya Gokul Mission, National Livestock Mission, and Infrastructure Development Funds for dairy processing and animal husbandry.
Matsya Sampada
(1) enhance aquaculture productivity from existing 3 to 5 tons per hectare
(2) double exports to ?1 lakh crore and
(3) generate 55 lakh employment opportunities in the near future
Five integrated aquaparks will be setup
Social sector
Here are some of these announcements:
PM Awas Yojana (Grameen): 2 crore more houses will be taken up in the next five years to meet the requirement arising from increase in the number of families.
Rooftop solarization and muft bijli: Through rooftop solarization, one crore households will be enabled to obtain up to 300 units free electricity every month.
Housing for middle class: 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.
Medical Colleges: Government plans to set up more medical colleges by utilizing the existing hospital infrastructure under various departments. A committee for this purpose will be set-up to examine the issues and make relevant recommendations.
Cervical Cancer Vaccination: Government will encourage vaccination for girls in the age group of 9 to 14 years for prevention of cervical cancer.
Maternal and child health care: Upgradation of anganwadi centres under “Saksham Anganwadi and Poshan 2.0" will be expedited for 14 improved nutrition delivery, early childhood care and development
Ayushman Bharat: Healthcare cover under Ayushman Bharat scheme will be extended to all ASHA workers, Anganwadi Workers and Helpers.
Quick Highlight Here are highlights:
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Part B
Direct taxes
Indirect taxes
Tax rationalization efforts over the years
Achievements in tax-payer services
Economy-then and now
Source: Live Mint
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