On February 1, 2024, Finance Minister Nirmala Sitharaman presented the interim budget ahead of the Lok Sabha elections. Serving as a provisional budget, it focuses on continuation of old policies, until the newly formed government announces the final Union Budget for 2024-2025, likely in the month of July.
Here are the key takeaways from the interim budget announcement:
1. Capital Expenditure - For FY24-25, the capex target was raised by 11.1 %, and set to 11.1 lakh crore, which is 3.4% of the GDP.
2. Revised and Budget Estimates
- For FY23-24, Sitharaman stated that the Revised Estimate of the total receipts other than borrowings is 27.56 lakh crore, of which the tax receipts are 23.24 lakh crore. The Revised Estimate of the total expenditure was announced to be 44.90 lakh crore, and Revised Estimate of the fiscal deficit was stated as 5.8 per cent of GDP.
- For FY24-25, total receipts other than borrowings is estimated at 30.80 lakh crore, and the total expenditure is estimated at 47.66 lakh crore. The tax receipts are estimated at 26.02 lakh crore, the finance minister announced.
- Fiscal deficit in FY24-25 is estimated to be 5.1 per cent of GDP.
- Gross and net market borrowings through dated securities during 2024-25 are estimated at 14.13 and 11.75 lakh crore respectively, lesser than FY24-25. Sitharaman mentioned that private investments at scale is expected to lower government borrowings, which will "facilitate larger availability of credit for the private sector".
3. Income Tax
- She stated that direct tax collections have more than trebled in the last 10 years, and the return filers "swelled to 2.4 times".
- No changes made to income tax slabs, as the finance minister announced the government's proposal to "retain the same tax rates for direct taxes and indirect taxes including import duties".
4. Agriculture, Food processing and Fisheries
- Government to promote "private and public investment in post-harvest activities including aggregation, modern storage, efficient supply chains, primary and secondary processing and marketing and branding".
- Pradhan Mantri Matsya Sampada Yojana (PMMSY) will be stepped up to "enhance aquaculture productivity from existing 3 to 5 tons per hectare, double exports to 1 lakh crore and, generate 55 lakh employment opportunities".
5. Railways
- Sitharaman announced three new corridors for the railways - Energy, Mineral and Cement corridor, Port Connectivity Corridor and a High Traffic Density Corridor.
- These corridors were identified under the PM Gati Shakti Scheme to enable multi-modal connectivity, she stated.
- The Finance Minister also announced the conversion of 40,000 normal rail bogies to Vande Bharat standards "to enhance safety, convenience and comfort of passengers".
6. Health
- Healthcare cover under Ayushman Bharat scheme will be extended to all ASHA workers, Anganwadi Workers and Helpers.
- She also added that the Union government will encourage vaccination for girls between the age of 9 and 14 years for prevention of cervical cancer.
7. Energy
- 1 crore households will be enabled to obtain up to 300 units of free electricity every month through a roof-top solarisation scheme.
- "Viability gap funding for harnessing offshore wind energy potential for initial capacity of one giga-watt".
- "Coal gasification and liquefaction capacity of 100 MT will be set up by 2030. This will also help in reducing imports of natural gas, methanol, and ammonia".
- "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".
8. Housing
- Sitharaman stated that the government would launch a scheme to help sections of the middle class “living in rented houses, or slums, or chawls and unauthorized colonies” to purchase or build their own houses.
- Government to provide 2 crore additional houses under PMAY-Gramin in five years.
9. Blue Economy
- Sitharaman also announced a boost for the governments 'blue economy' initiative that promotes sustainable use of coastal resources.
"For promoting climate resilient activities for 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," she mentioned.
10. Viksit Bharat
- Sitharaman announced a high-powered committee for "an extensive consideration of the challenges arising from fast growing population growth and demographic changes".
"The committee will be mandated to make recommendations for addressing these challenges comprehensively in relation to the goal of ‘Viksit Bharat’", which refers to the Indian government's vision to transform India into a developed nation by 2047 - the country's 100th year of independence.
Additional inputs from Nidhi Jacob.