Aspirational and Futuristic Interim Budget 2024

The comprehensive Union Budget will be presented post-elections scheduled for April-May 2024. The budget carries the confidence of continuity, it will empower youth, poor, women and farmers. — Vinod Johri

 

The Budget session commenced on 31st Jan 2024 with President Draupadi Murmu addressing a joint session of both the houses of Lok Sabha and Rajya Sabha. Emphasizing the accomplishments of the Modi government over the last decade, Murmu noted that our economy, once categorized as part of the “fragile five,” is currently advancing positively and at a suitable pace, attributed to various governmental reforms enacted during this period.

President highlighted milestones such as the construction of the New Parliament, winning 100 medals in the recent Asian Games, the introduction of high-speed trains, a successful landing on the South Pole of the Moon, the inauguration of the Shri Ram Janmabhoomi Mandir, the abolition of Article 370, the launch of Bharat Nyay Sanhita, and the implementation of One Rank One Pension (OROP).

The interim budget functions as a provisional financial plan during an election year, addressing immediate financial needs until a new government is in place. This is inclusive budget laying strong foundation for Viksit Bharat. It reflects commitment to sustainable growth, in harmony with people and environment. 

Before the start of Budget Session, Prime Minister Narendra Modi had said that the Intermit Budget will provide a Disha Nirdesh for Viksit Bharat.

The Modi government is striving for consistent economic growth despite geopolitical uncertainties, with ongoing initiatives designed to support farmers, women, and those facing economic challenges.There are five key proposals that pack a punch. There is focus on fiscal prudence, capex push, green growth and skilling encouraging for sustainable development. It is not just green economy but white and blue economy too which have got boost and encouragement in the interim budget. 

Union Finance Minister Nirmala Sitharaman presented the Interim Budget 2024 on 1st Feb. 2024 against the backdrop of the upcoming Lok Sabha elections, marking her sixth successive budget presentation. Offering a vision for the next five years, Sitharaman predicted unprecedented growth, announcing a Rs 11.11 lakh crore capital expenditure for the next fiscal year, reflecting an 11 per cent increase from the current fiscal year, which in economic parlance, is sweet spot. Out of this, allocation of Rs. 6.2 Lakh crore is marked to defence. The FM announced a scheme to strengthen deep-tech technologies for defence purposes and expedite Atmnirbharta or self-reliance. Notably, the government aims to reduce the fiscal deficit target to 5.1 per cent of GDP in the upcoming fiscal year, further aiming for 4.5 per cent in FY26. The GDP has got new definition – Governance, Development and Performance. 

In a world that is experiencing a decadal high inflation, record fiscal deficits and high central bank benchmark rates, Bharat looks like a paragon of macro stability. This has been possible with prudent fiscal management and reform measures. 

Rural Bharat accounts for 30-40% of FMCG, durable sales in the country. Government is close to achieving 30 million units under rural housing scheme. Thus 20 million more houses are to be built in next 5 years under PMAY-Gramin. Allocation under MGNREGS is proposed to be increased 43% to Rs. 86000 Crore.

Budget 2024 Highlights

Direct and Indirect Tax

1. No change in direct and indirect tax including import tax. 
2. Tax break for start-up, investments made by Sovereign wealth funds, extended to March 31, 2025.
3. Govt to withdraw old disputed direct tax arreardemands of up to Rs 25,000 till FY2009 and Rs 10,000 for 2010-11 to 2014-15. It will benefit 1 crore taxpayers. The redundant tax arrears will be cleansed from records.
4. FM also proposes some tax benefits for pension funds.
5. Processing time of tax returns reduced from 93 days in FY14 to 10 day.
6. The number of tax filers swelled by 2.4 times, direct tax collection trebled since 2014.
7. Tax receipts for 2024-25 are projected at Rs 26.02 lakh crore.
8. Direct Tax Collections tripled in last 10 years. Return filing swelled to 2.4 times. 

Tourism – Spiritual tourism - the big theme playing out after the opening of Shri Ram Janmabhoomi Mandir in Ayodhya Dham is set to get a further boost with measures such as long-term loans to states for developing key destinations announced in the interim budget. Funds will be provided for development of tourism in Lakshadweep. Total budgetary allocation to the tourism ministry has been raised to Rs. 2,450 Crore in FY 2025. 

Air Connectivity - 517 new routes to be launched under UDAN Scheme.

Fiscal Announcements

1. Capex outlay of Rs 11.11 lakh crore.
2. Capex outlay at 3.4 percent of GDP.
3. FY24 Fiscal Deficit target revised to 5.8 per cent of GDP from 5.9 per cent.
4. 5.1% Fiscal Deficit target for FY 25.
5. Govt plans to reduce fiscal deficit to 4.5 per cent in 2025-26.
6. FY 25 Gross market borrowing target is Rs 14.13 lakh crore.
7. Net market borrowing seen at Rs 11.75 lakh crore.
8. Revised expenditure for FY 24 Rs 44.90 lakh crore.
9. Total revenue receipts in 2024-25 estimated at Rs 30 lakh crore vs revised estimate of Rs 26.99 lakh crore.
10. Food Subsidy 2.12 lakh crore.
11. FY 24 Divestment Target Cut to Rs 30,000 crore.
12. FY 25 Divestment Target set at Rs 50,000 crore.

Rail

1. Allocation Rs 2.55 lakh crore.
2. Three major economic railway corridors under the PM Gati Shakti to improve logistics efficiency and reduce cost.
3. Energy, mineral and cement corridors.
4. Port connectivity corridors.
5. Decongest high-traffic density corridors.
6. Promotion of urban transformation via Metro rail and NaMo Bharat.
7. 40,000 normal train bogies to be converted into high-speed Vande Bharat ones.

The budget also expects passenger earnings to rise by 14.29% to Rs. 80,000 crore in FY 25.

PLI Scheme - PLI scheme gets Rs 6,200 crore. The Government has given a fillip to manufacturing and introduced PLI scheme for toys, footwear and leather sectors and upped the budget allocated for electronics, automobiles, pharmaceuticals, white goods, drones and advanced chemistry cells & battery storage.

Agriculture

1. Promote investment in post-harvest activity by both private and public sector support.
2. Empower dairy farmers.
3. More efforts to control Foot and mouth disease.
4. Application of Nano-DAP to be expanded in all agro-climatic zones.
5. Crop insurance has been given to 4 crore farmers under PM Fasal Bima Yojana.
6. Five integrated Aqua Park to be set up.
7. Govt to launch Blue Economy 2.0 to promote aquaculture.
8. Implementation of Pradhan Mantri Matsaya Sampada Yojana to be stepped up to enhance aquaculture productivity, double exports and generate more jobs.
9. Direct financial assistance to 11.8 crore farmers under PM-KISAN.

Sunrise Tech – Mrs. Nirmala Sitharaman proposes Rs 1 lakh crore corpus to drive private investment in sunrise technologies. The Government’s massive push to promote private sector innovation and research through a corpus of Rs. 1 lakh crore could spur entrepreneurship in new age technologies such as Artificial intelligence, 5G, Quantum Computing, health and agrotech. Given our world class expertise in software services, we can easily expand the current scope with Artificial Intelligence, skill development and reskilling key.

Electronics & Chips – The Government is gearing up for a major expansion in chip and electronic manufacturing with an aim to transform the country into global hub. To achieve this, the interim budget for FY 25, proposed a 71.4% increase in allocation for both the sectors to Rs. 13,104 crore. The allocation for cybersecurity projects also received a sharp boost to Rs. 759 Crore in the interim budget. The allocation of compound and chip assembly has increased by 133% to Rs. 4204 crore. 

Healthcare

1. Healthcare facilities under Ayushman Bharat will be extended to all Aasha workers, Anganwadi workers.
2. Government plans to set up hospitals in all districts.
3. Vaccination of 9-14 year old girls for cervical cancer.
4. Saksham Anganwadi and Poshan 2.0 to be expedited for improved nutrition delivery, early childhood care and development.
5. Health sector to get Rs 90,170 crore, 13.8% higher than RE of Rs 79,220 crore for 2023-24.
6. Education - Education budget for 2024-25 seen at Rs 1.25 lakh crore, 14.5 per cent higher than revised estimate of Rs 1.1 lakh crore for 2023-24.

Housing

1. New housing plan for the middle class.
2. 2 crore houses to be built under PM Avas Yojana.
3. Pradhan Mantri Awas Yojana (Grameen) close to achieving target of 3 crore houses, additional 2 crore targeted for next 5 years.

Renewable energy

1. Viability gap funding for wind energy.
2. Setting up of coal gasification and liquefaction capacity– The budget also announced coal gasification and liquefication capacity of 100 million tonnes to be set up by 2030, with an aim to reduce import of natural gas, methanol and ammonia. 
3. Phased mandatory blending of CNG, PNG and compressed biogas.
4. Pradhan Mantri Sarvodaya Yojna – The interim budget proposed a big push to the rooftop solar segment, outlining that 10 million households will be enabled to get up to 300 units of free electricity under Pradhan Mantri Sarvodaya yojna with an outlay of Rs. 10,000 Crore. Around 20-25 GW of roof top solar capacity would be supported through solarisation of one crore households. 

Growth

1. Over 1 crore houses will get 300 units of free power under new Solar power policy.
2. Women participation in higher education has risen to 28 per cent in the last 10 years.
3. Target for Lakhpati Didi to be enhanced from 2 crore to 3 crore.
4. Credit assistance to 78 lakh street vendors under PM-Svanidhi. 
5. Over 22 crore Mudra loans disbursed in the last 10 years.
6. Our GDP mantra is: Governance, Development and Performance.
7. Jan Dhan accounts have helped government save over Rs 2 lakh crore.
8. Reservation of one-third seats in Parliament has enhanced the dignity of women.
9. Rs 30 crore mudra Yojana given to women entrepreneurs.
10. Skill India mission has trained over 1.4 crore youth to make them job ready.
11. The highest-ever medal tally in Asian Games reflects the high confidence level.
12. Direct transfers of Rs 34 lakh crore to the beneficiaries has led to big saving for the government.
13. In the last 10 years government has uplifted 25 crore people out of poverty.
14. Gareeb, Yuva, Mahila and Annadata are highest priority. 

For the sake of brevity, these are just pointers to the interim budget which is precursor to the regular budget. The comprehensive Union Budget will be presented post-elections scheduled for April-May 2024. The budget carries the confidence of continuity, it will empower youth, poor, women and farmers.           

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