Understanding the Interim Union Budget 2024-25
| IOP Desk - 01 Feb 2024

India's Economy Expected to Grow

Finance and Corporate Affairs Minister Nirmala Sitharaman on Thursday presented the Interim Union Budget for 2024-2025 in Parliament. She announced that India's Real GDP is projected to grow at 7.3% in the fiscal year 2023-24.

Part -A Summary

Increased Capital Expenditure

The government plans to increase the capital expenditure outlay for the next year by 11.1% to Rs 11,11,111 crore. This means that more money will be spent on building infrastructure and other important projects. This increase in spending will have a positive impact on economic growth and employment opportunities.

Positive Outlook for India's Economy

Despite global economic challenges, India's economy has shown resilience and maintained healthy macro-economic fundamentals. International organizations like the International Monetary Fund (IMF), World Bank, OECD, and ADB project that India's economy will continue to grow between 6.1% and 6.7% in the year 2024-25. This reflects the confidence of the global community in India's economic strength.

Strong Revenue Collections

The Finance Minister highlighted that the strong growth in economic activity has led to increased revenue collections. In December 2023, GST collection stood at ₹1.65 lakh crore, marking the seventh time that gross GST revenues have crossed the ₹1.6 lakh crore benchmark.

Focus on Fiscal Consolidation

The government aims to reduce the fiscal deficit below 4.5% by 2025-26. In line with this goal, the fiscal deficit for 2024-25 is estimated to be 5.1% of GDP.

Support for State Governments

The government will continue the scheme of providing fifty-year interest-free loans for capital expenditure to states. This year, a total outlay of Rs 1.3 lakh crore has been allocated for this purpose. This will support the states in implementing important reforms and development projects.

Empowering the People of India

The Finance Minister emphasized that the government's highest priority is the welfare of the poor, women, youth, and farmers. The government aims to improve the lives of these four major groups through various development programs. The goal is to create a prosperous and inclusive India by 2047.

Positive Transformation in the Last Ten Years

The Finance Minister highlighted the positive changes that have occurred in the Indian economy over the past decade. The government has focused on creating more opportunities for employment and entrepreneurship, which has led to economic growth and improved living standards for the people. The government's efforts are now being supported by empowered individuals who have been lifted out of poverty.

Future Plans for Development

The Interim Budget contains several announcements and strategies for the future development of India. The government plans to focus on the eastern region of the country and make it a powerful driver of India's growth. Additionally, initiatives like PM Awas Yojana (Grameen) and rooftop solarization will provide housing and free electricity to millions of households.

Pradhan Mantri Kisan Sampada Yojana

The Pradhan Mantri Kisan Sampada Yojana has helped 38 lakh farmers and created 10 lakh jobs. It has also provided credit linkages to 2.4 lakh Self-Help Groups (SHGs) and sixty thousand individuals through the Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana.

Opportunities for Tech-Savvy Youth

For our tech-savvy youth, this budget brings good news. The government will establish a corpus of one lakh crore rupees with a fifty-year interest-free loan. This corpus will provide long-term financing or refinancing with low or no interest rates. It will encourage the private sector to invest in research and innovation in emerging fields.

Railways and Aviation Sector

Three major economic railway corridor programs will be implemented for energy, mineral, and cement corridors, port connectivity corridors, and high traffic density corridors. Additionally, forty thousand normal rail bogies will be upgraded to Vande Bharat standards to improve safety and comfort for passengers. In the aviation sector, the number of airports has doubled to 149, and new routes are carrying 1.3 crore passengers. Indian carriers have also ordered over 1000 new aircraft.

Addressing Population Growth and Demographic Changes

A high-powered committee will be formed to address the challenges arising from fast population growth and demographic changes. This committee will make recommendations to achieve the goal of 'Viksit Bharat'.

Prime Minister's Vision

The Finance Minister highlighted the Prime Minister's vision for national development and the immense possibilities and opportunities that lie ahead. She emphasized that the country has overcome challenges through economic management and governance, leading to sustained high growth.

Part-B Summary

No changes have been proposed in taxation for this interim budget. The same tax rates for direct and indirect taxes have been retained. However, certain tax benefits for start-ups and investments made by sovereign wealth or pension funds have been extended for one more year. The budget also aims to withdraw outstanding direct tax demands to provide relief to honest taxpayers.

Direct and Indirect Taxes

The Finance Minister acknowledged the support of taxpayers and highlighted the increase in direct tax collections over the past 10 years. The government has reduced and rationalized tax rates, benefiting taxpayers with income up to Rs. 7 lakh. The budget also includes measures to simplify tax filing and reduce processing time for returns. On the indirect tax front, the implementation of GST has reduced the compliance burden on trade and industry. The tax base of GST has doubled, and average monthly gross GST collection has almost doubled as well.

Indian Economy

The Finance Minister assured that the government has successfully put the economy on a sustainable growth path with all-round development. She announced that a white paper will be released to analyze the mismanagement of previous years and draw lessons from it.

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