Introduction

The 2024 budget has emerged as a testament to fiscal stability, with one notable feature standing out: the steadfast maintenance of the existing tax landscape. In a move signaling continuity, the government has opted to keep tax rates untouched, offering a sense of assurance to businesses and individuals alike. This article delves into the nuances of the taxation aspects of the 2024 budget, exploring the implications, motives, and potential impacts on the economy.

What is an interim budget?

In an election year, the sitting government refrains from presenting a comprehensive budget. Instead, the finance ministers unveil an interim budget, addressing the government's expenses and revenues for a limited timeframe.

The interim budget comprises projections for the government's spending, income, fiscal deficit, financial performance, and forecasts for a brief period.

The interim budget avoids introducing major policy announcements that could pose a burden on the subsequent government.

The governing administration presents the interim budget in Parliament during a year with limited time for a comprehensive budget or when elections are scheduled in the same year. The responsibility for formulating the complete budget lies with the incoming government.

PART-A SUMMARY

Social Justice

• The Prime Minister will prioritize the empowerment of four key segments: the economically disadvantaged ('Garib' or poor), women ('Mahilayen'), youth ('Yuva'), and farmers ('Annadata').

‘Garib Kalyan, Desh Kalyan'

• Over the past decade, the government has provided assistance to 25 crore individuals, lifting them out of multi-dimensional poverty.
• DBT of Rs. 34 lakh crore using PM-Jan Dhan accounts led to savings of Rs. 2.7 lakh crore for the government.
• PM-SVANidhi has offered credit assistance to 78 lakh street vendors, with 2.3 lakh recipients obtaining credit for the third time.
• The PM-JANMAN Yojana aims to support the advancement of specifically vulnerable tribal groups (PVTG).
• The PM-Vishwakarma Yojana offers comprehensive assistance to artisans and craftsmen involved in 18 trades.

Welfare of ‘Annadata’

• The PM-KISAN SAMMAN Yojana extended financial aid to 11.8 crore farmers.
• PM Fasal Bima Yojana ensured crop insurance coverage for 4 crore farmers.
• The Electronic National Agriculture Market (e-NAM) integrated 1361 mandis, serving 1.8 crore farmers and facilitating trade worth Rs. 3 lakh crores.

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Momentum for Nari Shakti

• Thirty crore Mudra Yojana loans have been extended to women entrepreneurs.
• Female enrollment in higher education has witnessed a 28% increase.

• In STEM courses, girls and women constitute 43% of enrolment, one of the highest in the world.
• Over 70% of houses under the PM Awas Yojana are given to women from rural areas.

PM Awas Yojana (Grameen)

• Despite challenges posed by COVID, the goal of constructing three crore houses under the PM Awas Yojana (Grameen) is set to be accomplished soon.

• Two crore more houses are to be built in the next five years.

Rooftop solarization and muft Bijli

• Rooftop solarization will provide 1 crore households with 300 units of free electricity monthly.
• This initiative is anticipated to result in annual savings ranging from Rs. 15,000 to Rs. 18,000 per household.

Ayushman Bharat

• The Ayushman Bharat scheme's healthcare coverage will now include all ASHA workers, Anganwadi workers, and helpers.

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Agriculture and food processing

• The Pradhan Mantri Kisan Sampada Yojana has provided benefits to 38 lakh farmers and created employment opportunities for 10 lakh individuals.
• The Pradhan Mantri Formalization of Micro Food Processing Enterprises Yojana has provided credit linkages to 2.4 lakh self-help groups (SHGs) and 60,000 individuals.

Promoting growth, employment, and development through research and innovation.

• A fund of Rs. 1 lakh crore will be created through a fifty-year interest-free loan, aimed at providing long-term financing or refinancing with extended tenors and minimal or zero interest rates.
• A forthcoming initiative is set to be introduced to bolster deep-tech technologies for defense objectives and accelerate 'atmanirbharta' (self-reliance).

 Infrastructure

• The capital expenditure allocation for infrastructure development and employment generation will see an 11.1% increase to reach Rs. 11,11,111 crores, constituting 3.4% of the GDP.

Railways

• 3 major economic railway corridor programs identified under the PM Gati Shakti to be implemented to improve logistics efficiency and reduce cost
• Energy, mineral and cement corridors
• Port connectivity corridors
• High-traffic-density corridors
• The conversion of forty thousand regular rail bogies to meet Vande Bharat standards is planned.

Aviation Sector

• The total number of airports in the country has increased twofold, reaching 149.
• A total of 517 new routes have been established, catering to 1.3 million passengers.
• Indian carriers have made orders for more than 1,000 new aircraft.

Green Energy

• By 2030, a coal gasification and liquefaction capacity of 100 million metric tons (MT) is planned for establishment.
• Mandatory phased blending of compressed biogas (CBG) with compressed natural gas (CNG) for transportation and piped natural gas (PNG) for domestic purposes will be enforced.

Tourism sector

• States are encouraged to take up the comprehensive development of iconic tourist centers, including their branding and marketing on a global scale.
• A framework for rating the tourist centers based on the quality of facilities and services is to be established.
• States will receive long-term interest-free loans for financing development on a matching basis.

Investments

• From 2014 to 2023, the foreign direct investment (FDI) inflow amounted to USD 596 billion, doubling the inflow recorded from 2005 to 2014.

Reforms in the States for ‘Viksit Bharat’

• A proposed provision of Rs. 75,000 crore as a fifty-year interest-free loan aims to support state governments in implementing milestone-linked reforms.

Revised Estimates (RE) 2023–24

• The revised estimates (RE) for total receipts, excluding borrowings, stand at Rs. 27.56 lakh crore, with tax receipts contributing Rs. 23.24 lakh crore.
• The revised estimate (RE) for the total expenditure stands at Rs. 44.90 lakh crore.
• Revenue receipts at Rs. 30.03 lakh crore are expected to be higher than the budget estimate, reflecting strong growth momentum and formalization in the economy.
• The revised estimate (RE) for the fiscal deficit is 5.8% of the GDP for the fiscal year 2023–24.

Budget Estimates 2024–25

• Estimated at Rs. 30.80 lakh crore, total receipts, excluding borrowings, and total expenditure are projected at Rs. 47.66 lakh crore.
• Tax receipts are estimated at Rs. 26.02 lakh crore.
• The scheme involving a fifty-year interest-free loan for capital expenditure in states will be extended this year, with a total outlay of Rs. 1.3 lakh crore.
• The fiscal deficit in 2024–25 is estimated to be 5.1 per cent of GDP
• Anticipated for 2024–25, the estimated gross market borrowings through dated securities amount to Rs. 14.13 lakh crore, while net market borrowings stand at Rs. 11.75 lakh crore.

Conclusion

In a nutshell, the Interim Budget 2024 maintains tax stability and focuses on social justice, targeting the upliftment of key demographics. Significant allocations for agriculture, healthcare, and infrastructure highlight a commitment to sustainable development. Investments in technology and defense underscore self-reliance goals.

Increased capital expenditure in rail and aviation, coupled with environmental initiatives, mark key priorities. Collaborative efforts for state-level reforms and favorable financial estimates indicate a robust economic outlook.

In short, the Interim Budget sets a course for sustainable growth, emphasizing resilience and development for a promising future.

References

1. https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2001136
2. https://timesofindia.indiatimes.com/business/budget/budget-2024-highlights-budget-tax-slab-railway-budget-fm-nirmala-sitharaman-budget-speech-union-budget-2024-live/articleshow/107313275.cms?from=mdr
3. https://www.livemint.com/economy/budget-2024-25-key-highlights-live-updates-interim-budget-agriculture-infra-fiscal-deficit-nirmala-sitharaman-11706695416199.html