Context:
Recently, the Union Finance Minister presented the Interim Budget-2024 in the Parliament.
Highlights of Interim Budget 2024:
Vikasit Bharat:
- Embracing the principles of ‘Sabka Saath, Sabka Vikas, and Sabka Vishwas’ and the national approach of “Sabka Prayas,” the goal is to achieve a Vikasit Bharat (Developed India) by 2047.
- To facilitate milestone-linked reforms by State Governments for the vision of Developed India, a provision of Rs.75,000 crore as a fifty-year interest-free loan is proposed.
GDP Growth rate:
- The real GDP growth as well as the real GDP growth rate are derived from the nominal GDP data by removing the effect of inflation.
- For the coming year, the nominal GDP is likely to grow by just 10.5%. If one considers an inflation rate of 4 to 4.5%, it would suggest a GDP growth rate of 6% to 6.5% in 2024-25.
Fiscal Deficit and Tax Rates:
- The revised fiscal deficit for the fiscal year 2023-24 stands at 5.8% of the GDP, and it is projected to be 5.1% for FY25. The objective is to bring it down below 4.5% in FY26.
- Notably, there are no alterations to the tax rates for both direct and indirect taxes.
- A notable step includes the withdrawal of outstanding direct tax demands, up to Rs 25,000 for FY 2009-10 and up to Rs 10,000 for FYs 2010-11 to 2014-15.
Budget breakdown in various sectors:
Infrastructure Sector:
• Increasing the capital expenditure outlay for infrastructure development and employment generation by 11.1%, reaching Rs. 11,11,111 crores, equivalent to 3.4% of the GDP.
- Implementation of three major economic railway corridor programs under PM Gati Shakti, targeting improved logistics efficiency and cost reduction. These include:
- Energy, Mineral, and Cement Corridors
- Port Connectivity Corridors
- High-Traffic Density Corridors.
- Conversion of 40,000 regular rail bogies to adhere to Vande Bharat standards.
- The significant expansion of air connectivity in India is evident, with the doubling of airports to 149.
- Proactive measures by Indian carriers include ordering over 1000 new aircraft. Emphasis remains on the swift expansion of existing airports and the development of new ones.
Investment Initiatives:
- The Foreign Direct Investment (FDI) inflow from 2014-23 amounted to $596 billion, marking a twofold increase from 2005-14.
- To promote sustained foreign investment, negotiations will be undertaken on bilateral investment treaties with foreign partners, aligning with the spirit of ‘First Develop India.’
Social Sector Initiatives:
- The Prime Minister is dedicated to uplifting four major segments: the ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth), and ‘Annadata’ (Farmer).
- The PM Awas Yojana (Grameen) aims to achieve the target of three crore houses soon, with an additional two crore houses planned in the next five years.
- A new government scheme will be introduced to assist deserving sections of the middle class residing in rented houses, slums, chawls, or unauthorized colonies in purchasing or constructing their own homes.
Women and Child Welfare Initiatives:
- Lakhpati Didi Empowerment: The goal for the Lakhpati Didi initiative has been elevated from 2 crore to 3 crore, aiming to create financial empowerment among a larger segment of women.
- Cervical Cancer Prevention Vaccination Program: To prevent cervical cancer, specifically targeting girls aged 9 to 14 years, ensuring early and comprehensive healthcare for this demographic.
- Integrated Maternal and Child Care Schemes: Under the umbrella initiative ‘Saksham Anganwadi and Poshan 2.0,’ an expedited plan is in place to upgrade Anganwadi Centres, enhancing their capacity to cater to maternal and child welfare needs efficiently.
- Under Mission Indradhanush, the introduction of the U-WIN platform will be implemented for effectively managing immunization.
- Inclusivity in healthcare coverage will be prioritized by extending the Ayushman Bharat scheme to include all ASHA workers, Anganwadi Workers, and Helpers.
Agricultural Sector:
- Nano DAP Expansion: The application of Nano DAP on various crops will see an extensive expansion across all agro-climatic zones, harnessing the benefits of nanotechnology in agriculture.
- Atmanirbhar Oil Seeds Abhiyan: A strategic initiative is underway to achieve self-reliance (Atmanirbharta) in oil seeds like mustard, groundnut, sesame, soybean, and sunflower, reflecting a commitment to bolster domestic production.
- Dairy Development Program: A comprehensive program is in the works to support dairy farmers from successful schemes such as the Rashtriya Gokul Mission, National Livestock Mission, etc. for dairy processing and animal husbandry.
- Matsya Sampada Acceleration: To enhance aquaculture productivity from the current 3 to 5 tons per hectare, double exports to 1 lakh crore, and generate 55 lakh employment opportunities shortly. Additionally, the establishment of five integrated aquaparks is on the agenda for further expansion and development.
- The decline in Subsidy Bill: The center’s subsidy bill on the 3Fs viz. food, fertilizer, and fuel is recorded to fall to a five-year low of Rs. 3,81,175 crores in 2024-25.
Research and Development (R&D) Sector:
- Creation of Rs. 1 Lakh Crore Fund: A substantial corpus of one lakh crore rupees has been earmarked to incentivize the private sector, fostering significant advancements in research and innovation, particularly in emerging and transformative sectors.
- Innovative Deep Tech Scheme: Introducing a pioneering scheme dedicated to fortifying deep-tech technologies, specifically focusing on defense applications. This initiative aims to accelerate self-reliance (‘atmanirbharta’) in cutting-edge technologies crucial for national security.
MGNREGS Funding:
- With the allocation of Rs. 86,000 crores for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the budget for the scheme for the financial year 2024¬-25 has been hiked by Rs. 26,000 in comparison with the 2023-24 budget estimates, though it is the same as the revised estimates for the ongoing financial year 2023-24.
- So, the net gain for the rural employment scheme could be zero or even negative.
Green Energy Sector:
To fulfill the commitment to ‘net zero’ by 2070, the following steps will be undertaken:
- Rooftop solarization to provide 300 units of free electricity every month to one crore households, resulting in annual savings of Rs. 15,000 to Rs. 18,000 per household.
- Viability gap funding will support the harnessing of offshore wind energy potential, aiming for an initial capacity of one gigawatt.
- By 2030, a coal gasification and liquefaction capacity of 100 MT will be established, contributing to the reduction of imports of natural gas, methanol, and ammonia.
- Phased mandatory blending of Compressed Biogas (CBG) in Compressed Natural Gas (CNG) for transportation and piped natural gas (PNG) for domestic purposes will be mandated.
- Introducing a new bio-manufacturing and bio-foundry scheme, focusing on eco-friendly alternatives such as biodegradable polymers, bio-plastics, bio-pharmaceuticals, and bio-agri-inputs.
- Additionally, the launch of the Blue Economy 2.0 scheme will underscore climate-resilient practices and also include restoration and adaptation measures, integrated coastal aquaculture, and mariculture, adopting a multi-sectoral approach.
About Budget, Interim Budget, and Vote on Account:
• Annual Financial Statement (Article 112):
- The Indian Constitution, under Article 112, mandates the presentation of an annual financial statement (Popularly known as ‘Budget’) by the Government of India detailing its estimated receipts and expenditures for a specific financial year.
- This statement is referred to as the ‘annual financial statement’ and needs approval from both Houses of Parliament.
• Interim Budget in Election Years:
- In election years, the incumbent government cannot present a full budget due to the potential change in executive after the polls.
- Instead, an interim budget is presented, seeking approval for funds required for the transitional period until the new government presents a full budget.
• Votes on Account:
- Article 116 of the Constitution allows the Lower House to make grants in advance for the estimated expenditure for a part of any financial year through ‘Vote on Account’.
- Vote on account authorizes the withdrawal of necessary funds from the Consolidated Fund of India.
- A vote on account is a simple process without debate and is valid for a limited period (two to four months).