Indian Budget 2024 - 2025: Your Ultimate Guide

byLearnTelangana Team -
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Indian Budget Report 2024 - 2025: An Overview

The interim budget for 2024 - 2025 was presented by Finance Minister Nirmala Sitharaman on February 1, 2024, ahead of the general elections in April-May. The budget outlines the allocations to ongoing programmes for the first three months of the fiscal year until the full budget is drafted and presented by the new government. The budget also provides a review of the economic performance and outlook of the country, as well as a roadmap for a long-term plan linked to Vision 2047.





Economic Performance and Outlook

The budget highlights the positive transformation of the Indian economy in the last 10 years, with an average growth rate of 6.8% from 2014 to 2023. The budget projects that the Indian economy will grow at over 7% in the coming years and is expected to become the third-largest economy in the world in the next three years, with a GDP of $5 trillion. The budget also claims that the economy has achieved macroeconomic stability, fiscal consolidation, low inflation, high foreign exchange reserves, and improved ease of doing business.

The budget acknowledges the challenges posed by the COVID-19 pandemic and the subsequent lockdowns, which resulted in a contraction of 7.3% in 2020-21. However, the budget asserts that the economy has shown a strong recovery in the second half of 2020-21, with a growth of 0.4% in the third quarter and an estimated growth of 1.6% in the fourth quarter. The budget attributes the recovery to the timely and proactive measures taken by the government, such as the Aatmanirbhar Bharat package, the Pradhan Mantri Garib Kalyan Yojana, the production-linked incentive scheme, and the vaccination drive.

The budget also expresses confidence in the resilience and potential of the economy, citing the positive indicators such as the record high GST collections, the robust FDI inflows, the buoyant stock market, the revival of industrial production, and the improvement in consumer and business sentiment.




Budget Allocations and Priorities

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.  of which Rs. 5.54 lakh crore is for the first three months. The budget maintains the revenue deficit target of 3% of GDP and the fiscal deficit target of 4.5% of GDP by 2025-26, as per the Fiscal Responsibility and Budget Management Act. The budget also estimates a nominal GDP growth of 14.4% and a tax revenue growth of 16.7% for 2024-25.
  • 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.

 of which Rs. 5.54 lakh crore is for the first three months. The budget maintains the revenue deficit target of 3% of GDP and the fiscal deficit target of 4.5% of GDP by 2025-26, as per the Fiscal Responsibility and Budget Management Act. The budget also estimates a nominal GDP growth of 14.4% and a tax revenue growth of 16.7% for 2024-25.

The budget prioritizes the following sectors and programmes for the interim period:

  • Health and well-being: The budget allocates Rs. 2.23 lakh crore for the health sector, an increase of 137% from the previous year. The budget focuses on strengthening the health infrastructure, especially in the rural and urban areas, and enhancing the capacity for COVID-19 management and vaccination. The budget also proposes to launch a new scheme, the Pradhan Mantri Atmanirbhar Swasth Bharat Yojana, with an outlay of Rs. 64,180 crore over six years, to develop primary, secondary, and tertiary health care systems, and to support the National Health Mission, the Ayushman Bharat scheme, and the National Digital Health Mission.

  • Agriculture and rural development: The budget allocates Rs. 16.5 lakh crore for the agriculture sector, an increase of 10% from the previous year. The budget reaffirms the government’s commitment to the welfare of the farmers and the doubling of their income by 2022. The budget also announces a hike in the minimum support price for various crops, an expansion of the coverage of the Pradhan Mantri Fasal Bima Yojana, and a boost to the agricultural credit target. The budget also allocates Rs. 1.48 lakh crore for the rural development sector, an increase of 4% from the previous year. The budget emphasizes the importance of the Mahatma Gandhi National Rural Employment Guarantee Scheme, the Pradhan Mantri Awas Yojana, the Pradhan Mantri Gram Sadak Yojana, and the Swachh Bharat Mission for providing employment, housing, connectivity, and sanitation to the rural population.

  • Infrastructure and manufacturing: The budget allocates Rs. 5.54 lakh crore for the infrastructure sector, an increase of 34% from the previous year. The budget aims to boost the infrastructure development and create a multiplier effect on the economy. The budget also announces the launch of a new scheme, the National Infrastructure Pipeline, with an outlay of Rs. 111 lakh crore over five years, to finance projects in various sectors such as roads, railways, ports, airports, power, urban, and rural infrastructure. The budget also allocates Rs. 1.97 lakh crore for the manufacturing sector, an increase of 13% from the previous year. The budget supports the Make in India initiative and the production-linked incentive scheme, which aim to enhance the competitiveness and self-reliance of the domestic industry, especially in the sunrise and strategic sectors.

  • Education and skill development: The budget allocates Rs. 93,224 crore for the education sector, a decrease of 6% from the previous year. The budget focuses on the implementation of the National Education Policy 2020, which aims to transform the education system and make it more accessible, inclusive, and quality-oriented. The budget also proposes to set up 100 new Sainik Schools, 15,000 schools as exemplar schools, and 750 Eklavya model residential schools in tribal areas. The budget also allocates Rs. 3,002 crore for the skill development sector, an increase of 19% from the previous year. The budget supports the Skill India Mission, which aims to provide vocational training and certification to the youth and enhance their employability and entrepreneurship.

  • Social welfare and inclusion: The budget allocates Rs. 4.37 lakh crore for the social welfare and inclusion sector, an increase of 14% from the previous year. The budget addresses the needs of the vulnerable and marginalized sections of the society, such as the women, children, senior citizens, persons with disabilities, and scheduled castes and tribes. The budget also announces various schemes and measures for the empowerment and protection of these groups, such as the Pradhan Mantri Ujjwala Yojana, the Pradhan Mantri Matru Vandana Yojana, the Pradhan Mantri Vaya Vandana Yojana, the Pradhan Mantri Jan Dhan Yojana, the Pradhan Mantri Jeevan Jyoti Bima Yojana, the Pradhan Mantri Suraksha Bima Yojana, the Stand Up India scheme, and the National Commission for Allied and Healthcare Professionals Bill.

Roadmap for Vision 2047

The budget also provides a glimpse of the government’s vision for the next 25 years, when India will celebrate its 100th year of independence. The budget outlines the following six pillars of the vision:

  • Aatmanirbhar Bharat: The vision aims to make India a self-reliant and resilient economy, with a strong domestic production base, a diversified export basket, a robust digital infrastructure, and a vibrant innovation ecosystem.
  • Green India: The vision aims to make India a leader in the global fight against climate change, with a low-carbon and circular economy, a clean and renewable energy mix, a green and efficient transport system, and a sustainable and resilient agriculture sector.
  • Healthy India: The vision aims to make India a healthy and happy nation, with a universal and affordable health care system, a preventive and holistic approach to wellness, a nutritious and balanced diet, and a fit and active lifestyle.
  • Inclusive India: The vision aims to make India a harmonious and egalitarian society, with equal opportunities and rights for all, a participatory and responsive governance system, a vibrant and diverse culture, and a strong and united national identity.
  • Skilled India: The vision aims to make India a skilled and productive workforce, with a quality and relevant education system, a lifelong and flexible learning culture, a demand-driven and industry-aligned skill development system, and a conducive and rewarding environment for entrepreneurship and innovation.
  • Global India: The vision aims to make India a responsible and influential global player, with a proactive and constructive role in international affairs, a strategic and mutually beneficial partnership with other countries, a competitive and attractive destination for trade and investment, and a soft and cultural power for the world.

Conclusion

The interim budget for 2024 - 2025 is a balanced and pragmatic document that reflects the government’s confidence in the economic recovery and growth potential of the country. The budget also sets the tone for the upcoming general elections, by showcasing the government’s achievements and aspirations for the future. The budget also lays down the foundation for a long-term vision for the country, which will be further elaborated by the new government in the full budget. The budget is expected to have a positive impact on the economy and the society, and pave the way for India’s transformation into a $5 trillion economy and a global leader by 2047.

For more details and analysis on the budget, you can refer to the following sources:

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