Finance Minister Nirmala Sitharaman today said India’s economy is going through a profound transformation while presenting the Narendra Modi government’s last budget before the Lok Sabha polls due by May.
The government is focused on improving conditions for the poor, women, youth and farmers, Ms Nirmala Sitharaman said in her Budget 2024 speech, setting the tone for welfare schemes to be announced in these areas.
The Finance Minister said that the next five years will see unprecedented economic growth in India. As per the Finance Minister, India’s economy, the fastest growing among major nations, is going through profound change.
The Budget has been touted as a roadmap to “Vikshit Bharat”, or developed India, by 2047.
Electronics National Agricultural Market
For modernizing agricultural trade, the Electronics National Agricultural Market has successfully integrated 1361 mandis, offering services to 1.8 crore farmers. With a trading volume exceeding 3 lakh crore rupees, the sector is witnessing inclusive, balanced, and higher growth prospects. Presenting the interim Budget 2024-25, Finance Minister Nirmala Sitharaman also said the government will promote public and private investment in post-harvesting agriculture activities. Additionally, PM Kisan Sampada Yojana has benefitted 38 lakh farmers and generated 10 lakh employment.
Empowering Youth through Education and Skill Development
The government’s commitment to youth empowerment is evident through initiatives like PM Schools for rising India, which focus on delivering quality education. The Skill India mission has trained 1.4 crore youth, upskilled 54 lakh individuals, and established 3000 new ITIs, 92 universities and 7 IITs, fostering a skilled workforce for the nation’s development.
Notable Increase in Real Income and Tax Reforms
The Finance Minister Sitharaman announced the withdrawal of outstanding disputed tax demands. The move is set to benefit 1 crore taxpayers. Recent updates indicate a remarkable 50% increase in the average real income of the populace. The implementation of the GST regime has significantly boosted tax-based growth, fostering economic stability and efficiency in revenue collection. Additionally, tax policies remain stable, with no proposed changes, ensuring continuity and stability for taxpayers and businesses.
“I do not propose to make any changes to taxation and propose to retain same tax rates for direct and indirect tax rates including import duties,” said FM.
Strengthening the Financial Sector for Investment
Addressing the need for robust investment avenues, the government aims to prepare the financial sector by enhancing its size, capacity, skills, and regulatory framework. This initiative is poised to attract and facilitate substantial investments, further bolstering economic growth.
Housing and Rural Development Initiatives
“Despite challenges posed by the Covid pandemic, the government’s commitment to housing and rural development remains steadfast. The PM Awas Yojana Rural is nearing its target of 3 crore houses, with plans to undertake an additional 2 crore houses in the next 5 years, catering to the increasing demand for affordable housing,” highlighted Nirmala Sitharaman.
Empowering Women
Success of self-help groups empowered 1 crore women to become “Lakhpati didis”, government says while presenting Budget 2024. Empowering rural women and transforming socio-economic landscapes, 83 lakh Self-Help Groups (SHGs) comprising 9 crore women are driving initiatives for empowerment and self-reliance, contributing significantly to rural development. FM Nirmala Sitharaman pledged to increase housing in the next five years, expand free electricity and improve medical care, especially for women.
Ms Nirmala Sitharaman further announced the government’s plans to focus on vaccination against cervical cancer for girls aged 9 to 14 as part of her Interim Budget 2024. The Finance Minister also announced multiple other health-related schemes in her speech, including extending Ayushman Bharat cover to all Asha workers and Anganwadi workers and helpers.
Environmental and Defense Capabilities
A new scheme focusing on strengthening deep-tech for defence purposes is set to be launched, underscoring the government’s commitment to bolstering technological innovation and national security. Funds allocated for Wind Energy as part of Zero Emission Goal.
Infrastructure Upgrades
The government is prioritising infrastructural upgrades in regions like Lakshadweep to support transportation and tourism. 70% of rural houses under PM Aawaz Yojana owned or jointly owned by women. The scheme for middle-class housing set to launch. Also, FM announced eastern region development is to be emphasized.
Nirmala Sitharaman while delivering her Budget Session speech on 1 February said that the Prime Minister Narendra Modi government would implement three railway corridor program — energy, mineral and cement corridor; port connectivity corridors; and high traffic density corridors.
“The projects have been identified under the PM Gati Shakti for enabling multi-modal connectivity. They will improve logistics efficiency and reduce cost,” said Finance Minister Nirmala Sitharaman.
The minister further added, 40,000 normal railway bogies will be converted to Vande Bharat standard. In her Budget 2024 speech, FM Nirmala Sitharaman said that the Indian government will spend a record 11.11 trillion rupees on infrastructure creation in 2024/25, to ensure India remains one of the world’s fastest growing major economies.
The Finance Minister also announced that the government will focus on setting up more medical colleges by utilising existing hospital infrastructure in the country. A committee will be set up to make relevant recommendations, she said.
Stimulating Startups and SMEs
Tax benefits for startups, investments made by sovereign wealth, pension funds to be extended to March 2025. Tax exemptions for startups have been extended, alongside efforts to support MSMEs with timely finances, technological assistance, and training for global competitiveness. These initiatives aim to foster entrepreneurship and bolster the growth of small and medium-sized enterprises.
Fiscal Deficit Management and Market Borrowing
FY25 gross borrowing is estimated at ₹14.13 trillion, achieving a reduction from that of FY24. FM has adopted an aggressive fiscal consolidation target. She has announced an FY25 fiscal deficit target of 5.1% as against the expectation of 5.3% levels. In FY24 the fiscal deficit target of 5.8% has been achieved thanks to better revenue mobilization as against the target of 5.9%. With fiscal deficit targets set for the upcoming years, the government aims to reduce the deficit to below 4.5% by FY26. Market borrowing projections and expenditure allocations reflect a strategic approach towards fiscal management and economic stability. The allocation for capital expenditure for the financial year starting April 1 is 11.1% higher than the capex for the current fiscal year, Finance Minister Nirmala Sitharaman said on Thursday in her budget speech.
