On February 1, 2024, Finance Minister Nirmala Sitharaman unveiled the Interim Budget for the fiscal year 2024–25, outlining the government's vision and strategies to propel India towards sustainable growth. The guiding principle of Reform, Perform, Transform' sets the tone for the budget's comprehensive approach. This analysis explores the key updates, strategies, and financial estimates presented in the budget, emphasizing its focus on four pivotal areas: the poor, youth, women, and farmers.
Economic Overview
The Finance Minister highlighted India's successful navigation of global complexities and challenges, attributing it to structural reforms and pro-people programs. The Finance Minister acknowledged the improved efficiency in savings, credit, and investments, reflecting the strengthening of the financial sector.
Key Updates:
1.Strengthening Defense Sector with Deep Tech
A new scheme was introduced to enhance deep-tech capabilities for the defense sector, aligning with the government's focus on national security and technological advancements.
2.Cervical Cancer Vaccination
The government unveiled plans to prioritize vaccination against cervical cancer for girls aged 9 to 14, demonstrating a commitment to women's health and preventive healthcare measures.
3. Global Affairs and Economic Growth
The Finance Minister acknowledged the complexity of global affairs, citing challenges posed by wars. However, she highlighted India's resilience and successful management, positioning the country for sustained high growth.
Tax Proposals and Reforms:
1.Improving Taxpayer Services
To enhance taxpayer services, the Finance Minister proposed the withdrawal of outstanding direct tax demands up to Rs. 25,000 for years up to 2009-10 and Rs.10,000 for the period from 2010 to 2015, providing relief to around 1 crore taxpayers.
2. Continuation of Tax Rates
The Finance Minister maintained existing tax rates for direct and indirect taxes, including import duties. She addressed expiring tax exemptions for startups and IFSC units, proposing an extension until March 31, 2025, to ensure continuity in taxation.
3. GST Impact
The Finance Minister highlighted the positive impact of GST, reducing the compliance burden on trade and industry. She cited a survey indicating that 94% of industry leaders view the transition to GST as largely positive, benefiting states and consumers.
4.Previous Tax Reforms
The Finance Minister acknowledged the simplification of tax procedures, citing the new tax scheme with no liability for those earning up to Rs. 7 lakh a year. Other reforms included a decrease in corporate tax rates and expedited processing of tax returns.
Budget Estimates:
- 2024-25
- Total receipts (other than borrowings): Rs. 30.80 lakh crores
- Total expenditure: Rs. 47.66 lakh crores
- Tax receipts: Rs. 26.02 lakh crores
- Fiscal deficit estimated at 5.1% of GDP
- Revised Estimates 2023-24
- Revised estimates of total receipts (other than borrowings): Rs. 27.56 lakh crores
- Revised estimates of total expenditure: Rs. 44.90 lakh crores
- Revised fiscal deficit at 5.8% of GDP, reflecting a prudent fiscal approach
Strategic Initiatives:
1. AmritKaal as Karthavya Kaal: The government expressed its commitment to creating a high-growth economy, focusing on milestone-linked reforms by providing a 50-year interest-free loan of Rs.75,000 crore to states.
2. FDI- First Develop India: Highlighting the success of FDI inflow from 2014-23, The Finance Minister emphasized negotiating bilateral treaties with a focus on 'First, Develop India.'
3. Next-Generation Reforms: The Finance Minister announced the government's intent to undertake next-generation reforms, indicating a forward-looking approach to economic development.
Sectoral Initiatives:
1.Railways:Three major railway corridor programs were introduced, aiming to enhance logistics efficiency and safety for passenger trains. Additionally, a significant conversion of rail bogeys to Vande Bharat standards was proposed.
2. Green Energy: Initiatives in green energy included viability gap funding for shore-wind energy, coal gasification and liquification capacity, and mandatory blending of compressed biogas in natural gas for transport and domestic use.
3.E-Vehicle Ecosystem and Bio-Manufacturing: The government pledged to expand and strengthen the e-vehicle sector and launch a scheme for bio-manufacturing to encourage biodegradable materials.
4.Domestic Tourism: Acknowledging the success of G20 events, the government expressed support for developing tourism centers globally, offering long-term interest-free loans to states for this purpose.
Social Initiatives:
1. Societal Changes: A high-powered committee was proposed to review challenges arising from population growth and demographic changes.
2. Empowering Women: The government recognized the role of self-help groups (SHGs) in transforming the rural socio-economic landscape and aimed to honor and raise the target for such groups.
3. Technological Changes: A corpus of Rs. 1 lakh crore was proposed for providing interest-free loans to encourage private sector research and innovation in sunrise domains.
Vision for Viksit Bharat:
The Finance Minister presented a vision for "Viksit Bharat," envisioning a prosperous India in harmony with nature. The Finance Minister emphasized the potential of India to lead global growth, leveraging the demographic dividend, technology, and sustainable practices.
Conclusion:
The Union Budget 2024-25 outlined a holistic vision for India's development, addressing challenges and embracing growth through strategic initiatives, economic reforms, and sectoral allocations. With a focus on fiscal prudence, the budget aims to propel the country towards a sustainable and inclusive future,fostering innovation, and leveraging India's inherent strengths. As the government continues to navigate global complexities, the budget reflects a commitment to building a resilient and vibrant economy, paving the way for a Viksit Bharat.
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