Interim Union Budget 2024-25

Interim Union Budget 2024-25

GS-III: Indian Economy

(UPSC/State PSC)

Important for Prelims:

Interim Union Budget-2024, Developed India@2047, Key Features, Fiscal Deficit, Revenue Deficit, Gross Domestic Product, Inflation.

Important for Mains:

Important facts related to Interim Union Budget-2024, Conclusion.

O2 February, 2024

Why in News:

Union Minister of Finance and Corporate Affairs Smt Nirmala Sitharaman presented the Interim Union Budget 2024-25 on 1 February.

  • This is the sixth budget of Sitharaman and the 12th budget of the Modi administration.

key points:

  • Developed India@2047: This vision encompasses various aspects of development including economic growth, social progress, environmental sustainability and good governance.
  • Developed India@2047 aims to make India a developed nation by the year 2047, i.e. the 100th year of independence.
  • Development Mantra: This budget underlined the government's commitment to inclusive growth with the mantra of 'Sabka Saath, Sabka Vikas and Sabka Vishwas'.
  • Objective: The objective of this budget is to address the upliftment of social classes and move the nation towards a comprehensive development path.

About Interim Budget:

  • Interim Budget is often known as 'Vote on Account'. It is presented before the year in which general elections are to be held and is an interim budget until the new government is formed.
  • 'Vote on the account' refers to the advance allocation to the government under Article 116 of the Constitution which specifically defines the short-term expenditure requirements of the government.
  • In the interim budget, the estimates of revenue and expenditure are presented till the formation of the new government so that there is no problem in the smooth functioning of the country's economy and confidence in the economy remains.
  • According to the provision, the government cannot announce any new scheme or policy in the interim budget. In such a situation, the government will allocate funds to run the schemes which are already running smoothly.

​Key features

1. Housing

  • 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.
  • Rooftop solarization: One crore households will be enabled to obtain up to 300 units free electricity every month.
  • PM Awas Yojana (Grameen): Two crore more houses will be taken up in the next five years to meet the requirement arising from increase in the number of families.

2. Health

  • Vaccination for girls in age group of 9 to 14 years for prevention of cervical cancer.
  • Government plans to set up more medical colleges by utilizing the existing hospital infrastructure under various departments.
  • Upgradation of anganwadi centres under “Saksham Anganwadi and Poshan 2.0” will be expedited.
  • U-WIN platform for managing immunization and intensified efforts of Mission Indradhanush will be rolled out expeditiously.
  • Extension of healthcare cover under Ayushman Bharat scheme to all ASHA workers, Anganwadi Workers and Helpers.

3. Agriculture and related sectors

  • Application of Nano DAP on various crops will be expanded in all agro-climatic zones.
  • A strategy will be formulated to achieve ‘atmanirbharta’ for oil seeds. Focussed oil seeds: mustard, groundnut, sesame, soybean, and sunflower.
  • A comprehensive programme for supporting dairy farmers will be formulated. The success of existing schemes such Rashtriya Gokul Mission, National Livestock Mission, and Infrastructure Development Funds for dairy processing and animal husbandry will act as guiding light for such a programme.
  • Implementation of Pradhan Mantri Matsya Sampada Yojana (PMMSY), according to the speech, will be stepped up to: “(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 near future.”
  • Five integrated aquaparks will be setup.

4. Women

  • “Eighty-three lakh SHGs with nine crore women are transforming rural socio-economic landscape with empowerment and self-reliance”, said the Finance Minister.
  • The government aims to enhance the target for Lakhpati Didi from 2 crore to 3 crore.

5. Youth And Technology

  • For the tech savvy youth — A corpus of rupees one lakh crore will be established with fifty-year interest free loan.
  • “The corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates”, said the Finance Minister.
  • A new scheme will be launched for strengthening deep-tech technologies for defence purposes and expediting ‘Atmanirbharta’.

6. Infrastructure Development

  • The outlay for the next year is being increased by 11.1 per cent to eleven lakh, eleven thousand, one hundred and eleven crore rupees (` 11,11,111 crore). This would be 3.4 per cent of the GDP.
  • Three major economic railway corridor programmes will be implemented. These are:
  • energy, mineral and cement corridors,
  • port connectivity corridors, and
  • high traffic density corridors.
  • The projects have been identified under the PM Gati Shakti for enabling multi-modal connectivity.
  • Expansion of Metro and NaMO Bharat will be supported in large cities focusing on transit-oriented development.

7. Environment and Green Energy

  • Viability gap funding will be provided for harnessing offshore wind energy potential.
  • Coal gasification and liquefaction capacity of 100 MT will be set up by 2030.
  • Financial  assistance will be provided for procurement of biomass aggregation machinery.
  • Phased mandatory blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes will be mandated.
  • Electric Vehicle Ecosystem– Support to manufacturing and charging infrastructure.
  • Greater adoption of e-buses for public transport networks will be encouraged through payment security mechanism.
  • For promoting green growth, a new scheme of bio-manufacturing and bio-foundry will be launched.
  • Blue Economy 2.0— A scheme for restoration and adaptation measures, and coastal aquaculture and mariculture with integrated and multi-sectoral approach will be launched.

8. Tourism

  • States will be encouraged to take up comprehensive development of iconic tourist centres, branding and marketing them at global scale.
  • A framework for rating of the centres based on quality of facilities and services will be established.
  • Long-term interest free loans will be provided to States for financing such development on matching basis.
  • For domestic tourism— projects for port connectivity, tourism infrastructure, and amenities will be taken up on our islands. It will also include Lakshadweep.

9. FDI

  • The FDI inflow during 2014-23 was USD 596 billion marking a golden era. That is twice the inflow during 2005-14.
  • For encouraging sustained foreign investment– Negotiating bilateral investment treaties with the foreign partners, in the spirit of ‘first develop India’.

10. Population Growth and Demographic changes

  • The Government will form a high-powered committee for an extensive consideration of the challenges.

11. Reforms in the States

  • A provision of seventy-five thousand crore rupees as fifty-year interest free loan is proposed this year to support reforms by the State Governments.

12. Revised Estimates 2023-24

  • The Revised Estimate of the total receipts other than borrowings is Rs. 27.56 lakh crore, of which the tax receipts are 23.24 lakh crore.
  • The Revised Estimate of the total expenditure is Rs. 44.90 lakh crore.
  • The revenue receipts at Rs. 30.03 lakh crore are expected to be higher than the Budget Estimate.
  • The Revised Estimate of the fiscal deficit is 5.8 per cent of GDP.

13. Budget Estimates 2024-25

  • The fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP, adhering to that path.
  • The scheme of fifty-year interest free loan for capital expenditure to states will be continued this year with total outlay of Rs. 1.3 lakh crore.
  • The total receipts other than borrowings and the total expenditure are estimated at Rs. 30.80 and 47.66 lakh crore respectively.
  • The tax receipts are estimated at Rs. 26.02 lakh crore.

14. Direct taxes

  • Over the last ten years, the direct tax collections have more than trebled and the return filers swelled to 2.4 times.
  • Under the new tax scheme, there is now no tax liability for tax payers with income up to Rs. 7 lakh, up from Rs. 2.2 lakh in the financial year 2013-14.
  • The threshold for presumptive taxation for retail businesses was increased from Rs. 2 crore to Rs. 3 crore.
  • The threshold for professionals eligible for presumptive taxation was increased from Rs. 50 lakh to Rs. 75 Lakh.
  • Corporate tax rate was decreased from 30 per cent to 22 per cent for existing domestic companies and to 15 per cent for certain new manufacturing companies.
  • The age-old jurisdiction-based assessment system was transformed with the introduction of Faceless Assessment and Appeal, thereby imparting greater efficiency, transparency and accountability.
  • Introduction of updated income tax returns, a new Form 26AS and prefilling of tax returns have made filing of tax returns simpler and easier.
  • Average processing time of returns has been reduced from 93 days in the year 2013-14 to a mere ten days this year, thereby making refunds faster.

15. Indirect Taxes

  • GST has reduced the compliance burden on trade and industry.
  • Tax base of GST more than doubled.
  • The average monthly gross GST collection has almost doubled to Rs.1.66 lakh crore.
  • 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.
  • Number of steps were taken in Customs to facilitate international trade.

16. Tax Proposals

  • No changes relating to taxation — same tax rates for direct taxes and indirect taxes including import duties.
  • Withdrawal of outstanding direct tax demands (petty, non-verified, non-reconciled or disputed direct tax demands, many of them dating as far back as the year 1962) up to twenty-five thousand rupees (Rs 25,000) pertaining to the period up to financial year 2009-10 and up to ten-thousand rupees (Rs 10,000) for financial years 2010-11 to 2014-15.

Conclusion:

  • The interim Budget 2024, presented by Finance Minister Nirmala Sitharaman, addresses short-term financial needs amid the impending elections. Farmers and the underprivileged have been given priority in the budget focused on rural development and social schemes. Hopefully, this Budget should support positive change and innovation in sectors ranging from agriculture, infrastructure and healthcare to education, banking and industry.

Source: Indian Express

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Mains Question:

What do you understand by interim budget?  Outline the key features of Interim Union Budget 2024-25.

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