Highlights of the Interim Budget 2024-2025 Presented by FM Nirmala Sitharaman

Highlights of the Interim Budget 2024-2025. Finance Minister Nirmala Sitharaman tabled the Interim Budget for fiscal year 2024-25 on 1st February 2024. She outlined the key focus areas and roadmap to continue India’s growth trajectory in the Amrit Kaal period. She outlined the key highlights of the budget focused on sabka saath, sabka vikas aur sabka vishwas.

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Here Are the Major Highlights of the Interim Budget 2024-2025:

Social Justice and Inclusion

In keeping with the government’s vision of sabka saath, sabka vikas, the budget provisions aim at upliftment of the poor, women, youth and farmers.

• Support to Vulnerable Sections
  • Over 25 crore people assisted out of multi-dimensional poverty over the last 10 years through various government schemes.
  • Rs 34 lakh crore transferred via Direct Benefit Transfers (DBT) to PMJDY accounts, leading to significant savings in subsidies.
  • 78 lakh street vendors received credit assistance under PM SVANidhi, with 2.3 lakh getting loans for the third time. This improved access to finance for small businesses.
• Tribal Welfare
  • PM JANMAN scheme announced for holistic development and improved livelihood opportunities for particularly vulnerable tribal groups (PVTGs).
• Artisan Support
  • PM Vishwakarma Yojana to provide end-to-end support such as tools, training, loans etc. to artisans from 18 different trades supporting their entrepreneurship.
• Rural Housing
  • Despite COVID challenges, construction of 3 crore houses to be completed under PM Awas Yojana (Gramin).
  • This provided huge boost to rural housing over the last few years.
  • Next phase announced to build 2 crore more rural houses over the next 5 years.
• Solar Rooftops
  • Under a new scheme, 1 crore households to receive 300 units of free electricity every month via solar rooftop installation.
  • This is expected to lead to savings of Rs 15,000-18,000 per household annually on electricity bills.
  • It will also support India’s renewable energy push.

Agriculture and Allied Sectors

Major provisions made to continue supporting farm incomes, reduce risks and improve market linkages:

• PM-KISAN
  • Rs 2 lakh crore transferred to 11.8 crore farmers under the PM-KISAN income support scheme since its inception.
  • The regular cash transfers provide financial stability to farmers.
• Crop Insurance
  • PM Fasal Bima Yojana extended crop insurance cover to over 4 crore farmers.
  • This helps protect against crop losses due to natural disasters.
• Market Linkages
  • eNAM integrated 1361 mandis across India, providing pan-India market access services to 1.8 crore farmers with trading volume of Rs 3 lakh crore.
  • This reduced information asymmetry and intermediaries, leading to better price discovery.
• Food Processing
  • 38 lakh farmers benefitted from PM Kisan Sampada Yojana which aims to augment food processing and cold chain infrastructure.
  • The scheme also led to job creation of 10 lakh.
  • 2.4 lakh self-help groups (SHGs) received credit linkages under PM FME scheme along with 60,000 individuals.

Healthcare

Increased healthcare access and insurance cover:

• Ayushman Bharat
  • Healthcare cover under Ayushman Bharat PMJAY scheme to be extended to all ASHA and Anganwadi frontline workers along with their helpers.
  • This provides health security to the workers delivering critical services.
• Medical Education
  • 28% increase seen in female enrollment in higher education over the years.
  • 43% of students in STEM courses are women, one of the highest gender ratios globally.
  • Efforts to improve affordability in medical education will continue.

Infrastructure Boost

Major investments planned across key infrastructure sectors:

• Increased Capex
  • Capital expenditure increased substantially by 11.1% to Rs 11,11,111 crore, taking it to 3.4% of GDP.
  • The rise in capex lays the foundation for a long-term multiplier effect.
• Railway Corridors
  • 3 major railway corridor projects approved to improve logistics and connectivity under the PM Gati Shakti master plan.
  • 40,000 old rail coaches to be upgraded to modern Vande Bharat standards for a faster and more comfortable travel experience.
• Air Connectivity
  • Number of operational airports doubled from just 74 in 2014 to over 149 now.
  • 517 new air routes have been opened up connecting all corners of the country.
  • Orders for over 1000 new aircraft placed by Indian carriers to serve the growing traffic.
• Energy Security
  • 100 million tonnes coal gasification and liquefaction capacity to be setup by 2030 to augment energy production.
  • Mandatory compressed biogas blending in CNG and PNG announced to boost domestic sources.
• Tourism Infrastructure
  • Long-term interest free loans to be provided to States for developing and upgrading iconic tourist centers.
  • This will boost tourism, hospitality and cultural heritage preservation.
• Foreign Investments
  • $596 billion in FDI inflows during 2014-2023, 2X of inflows during 2005-2014.
  • The increase has been driven by investor-friendly reforms and simplification.

Financial Roadmap

The budget balances fiscal consolidation imperatives with growth-oriented expenditures:

• Fiscal Consolidation
  • Revised fiscal deficit for 2023-24 estimated at 5.8% of GDP, on the path of gradual reduction.
  • 2024-25 fiscal deficit budgeted at 5.1% of GDP, adhering to the glide path.
• Expenditure
  • Total expenditure for 2024-25 budgeted at Rs 47.66 lakh crore, with focus on capital creation.
• Borrowings
  • Gross market borrowings of Rs 14.13 lakh crore planned for 2024-25 to fund the expenditure.
  • Market borrowings to remain stable as percentage of GDP.

Indirect Taxes

Tax stability and continued GST benefits:

• GST
  • Monthly GST collections more than doubled on average to Rs 1.66 lakh crore, indicating formalization.
  • Tax base expanded significantly, with 94% industry seeing it as a positive reform.
  • Reduced logistics costs and supply chain optimization due to GST.
• Customs Reforms
  • Import release time lowered substantially by 27-47% across sea ports, ICDs and air cargo complexes through procedural reforms.
  • This has facilitated a progressive increase in trade volumes over the years.

Direct Taxes

Low taxes, dispute resolution and improved compliance:

• Tax Rate Stability
  • No changes proposed in personal income tax rates and corporate tax rates, providing stability.
• Compliance
  • 2014-2023 saw 3X growth in tax collections and 2.4X rise in income tax return filers through improved compliance.
• Dispute Settlement
  • Waiver of demands up to Rs 25,000 related to disputes till FY2009-10, benefitting small cases.
  • Waiver of demands up to Rs 10,000 from FY2010-11 to FY 2014-15, reducing litigation.

The Way Forward

The budget sets the tone for the next phase of growth driven by capex, infrastructure, inclusive development and a competitive tax regime while maintaining fiscal prudence. The government aims to build on the strong macro fundamentals through a multi-pronged approach for improving both welfare and productivity.