Finance Minister Nirmala Sitharaman's Interim Budget 2024-25, as remarked by Prime Minister Narendra Modi today, seems to carry "confidence of continuity' and has been formulated considering the government's plan for the next five years, rather than 2024 despite the General Elections scheduled this year.
The FM's speech shows that fiscal consolidation, infra spending, investment in innovation, and ease of doing business remain the key themes for Interim Budget 2024. There are no firecrackers of sorts, something that would have wooed large masses, and rather the Centre has focussed too much on macro stability.
Here are the five key takeaways from the Budget 2024.
Fiscal consolidation on track
Finance Minister Nirmala Sitharaman says the government continues to focus on the path of fiscal consolidation to reduce fiscal deficit below 4.5 per cent by 2025-26. The fiscal deficit in 2024-25, she says, is estimated to be 5.1 per cent of GDP, adhering to the Centre's stated path. Also, she says the revised estimate of the fiscal deficit is 5.8 per cent of GDP, improving on the Budget Estimate of 5.9%.
Investment in innovation
Citing Prime Minister Modi's call for “Jai Jawan Jai Kisan Jai Vigyan and Jai Anusandhan”, the FM says for tech-savvy youth, this will be a golden era. "A corpus of rupees one lakh crore will be established with a fifty-year interest-free loan. The corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains. We need to have programmes that combine the powers of our youth and technology."
Simplifying direct taxes
Sitharaman also announced to improve taxpayer services, saying it's in line with the government’s vision to improve ease of living and ease of doing business. "There are a large number of petty, non-verified, non-reconciled or disputed direct tax demands, many of them dating as far back as the year 1962, which continue to remain on the books, causing anxiety to honest taxpayers and hindering refunds of subsequent years," says the FM.
Considering this, the interim budget proposes to withdraw such outstanding direct tax demands up to ₹25,000 pertaining to the period up to financial year 2009-10 and up to ₹10,000 for financial years 2010-11 to 2014-15. "This is expected to benefit about a crore taxpayers."
Market borrowings
According to the FM, the gross and net market borrowings through dated securities during 2024-25 are estimated at ₹14.13 and ₹11.75 lakh crore, respectively. Both will be less than that in 2023-24. "Now that the private investments are happening at scale, the lower borrowings by the Centre will facilitate larger availability of credit for the private sector."
CAPEX push continues
Building on the "massive tripling" of the capital expenditure outlay in the past 4 years resulting in a huge multiplier impact on economic growth and employment creation, the CAPEX outlay for the next year has been increased by 11.1% to ₹11,11,111 crore. "This would be 3.4 per cent of the GDP." The FM says the multipronged economic management over the past 10 years has complemented people-centric inclusive development. "Our vision for ‘Viksit Bharat’ is that of “Prosperous Bharat" in harmony with nature, with modern infrastructure, and providing opportunities for all.
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