In a dynamic session at Parliament, Finance and Corporate Affairs Minister, Smt. Nirmala Sitharaman, unveiled the Interim Union Budget for 2024-25, charting a course towards a ‘Viksit Bharat’ by 2047.
With a focus on inclusive growth and sustainable development, the budget outlines a comprehensive strategy to propel India’s economic trajectory to greater heights.
A Few Things To Know Understand Interim Union Budget 2024
What Is an Interim Union Budget and a Vote on Account?
An Interim Budget is presented by a government going through a transition period or in its last year in office before general elections.
Its purpose is to ensure the continuity of government expenditure and essential services until the new government can present a full-fledged budget after taking office.
Here’s the difference between an Interim Budget and a Vote on Account
- Constitutional Provision:
- Interim Budget: Governed by Article 112.
- Vote on Account: Governed by Article 116.
- Purpose:
- Interim Budget: It presents a financial statement by the government ahead of the general elections.
- Vote on Account: Its purpose is to fulfil essential government expenditures for a limited period until the budget is approved.
- Duration of Expenditure:
- Interim Budget: It covers a specific period, usually a few months until a new government is formed and a full budget is presented.
- Vote on Account: Generally granted for two months for an amount equivalent to one-sixth of the total estimation.
- Policy Changes:
- Interim Budget: Can propose changes in the tax regime.
- Vote on Account: Cannot change the tax regime under any circumstances.
- Impact on Governance:
- Interim Budget: Provides continuity in governance during the transition period between two governments.
- Vote on Account: Ensures the smooth functioning of the government and public services until the regular budget is approved.
What Do Budget-Related Funds Mean?
In India, the budget-related funds are:
- Consolidated Fund of India:
- As per Article 266(1) of the Constitution, this fund consolidates all revenues, loans, and loan repayments received by the Union Government.
- Withdrawals from this fund require parliamentary permission, except for Charged Expenditures such as Judges’ salaries.
- As per Article 266(1) of the Constitution, this fund consolidates all revenues, loans, and loan repayments received by the Union Government.
- Public Account of India:
- Governed by Article 266(2), this account includes incoming money from sources like provident funds, small savings, and postal deposits.
- The government manages these funds akin to a banker and does not require parliamentary permission for transfers.
- Governed by Article 266(2), this account includes incoming money from sources like provident funds, small savings, and postal deposits.
- Contingency Fund of India:
- Established under the Contingency Fund of India Act, 1950, and operated in accordance with Article 267(1), this fund serves to provide advances to the government for unforeseen expenditures during the fiscal year, pending authorization by Parliament.
- Funds withdrawn from this fund are replenished upon parliamentary approval through Supplementary Demands for Grants.
- Established under the Contingency Fund of India Act, 1950, and operated in accordance with Article 267(1), this fund serves to provide advances to the government for unforeseen expenditures during the fiscal year, pending authorization by Parliament.
The Highlights Of Interim Union Budget 2024-2025
The Interim Union Budget for 2024-2025, Presented by Finance and Corporate Affairs Minister Smt Nirmala Sitharaman, outlines several key points and initiatives:
Economic Growth Projection
India’s Real GDP is projected to grow at 7.3 per cent in the fiscal year 2023-24.
Various factors, such as strong performance in the second quarter of FY2023-24 and resilience in the face of global economic challenges, contribute to this growth.
Capital Expenditure Increase In Interim Union Budget 2024
The government increases the capital expenditure outlay for the next year by 11.1 per cent to Rs 11,11,111 crore, accounting for 3.4 per cent of GDP.
This increase aims to build on previous investment efforts and stimulate economic growth and employment.
Fiscal Deficit Estimate In Interim Union Budget 2024
The estimated fiscal deficit for 2024-25 stands at 5.1 per cent of GDP, aligning with the path of fiscal consolidation outlined in the previous budget.
FDI Inflow In Interim Union Budget 2024
Foreign Direct Investment (FDI) inflow during 2014-23 was USD 596 billion, indicating a significant increase compared to the previous decade.
Priority on Upliftment
The government emphasizes the upliftment of marginalized groups such as the poor, women, youth, and farmers.
The government directs various schemes and initiatives towards their welfare and empowerment.
Interest-Free Loans
The interim union budget 2024 continues schemes for providing fifty-year interest-free loans for capital expenditure to states and youth,
- with significant outlays aimed at fostering development and innovation.
Infrastructure Development
Focus on infrastructure development includes major railway corridor programs, aviation sector enhancements, and initiatives to provide free electricity through rooftop solarization to households.
High-Powered Committee
The government will form a high-powered committee to address challenges arising from population growth and demographic changes comprehensively.
Taxation and Economic Reforms
The Interim Union Budget 2024-2025 does not propose any changes in tax rates.
The government extends tax benefits for startups and investments, along with exemptions for certain income categories.
Direct Tax Withdrawal
The proposal suggests withdrawing outstanding direct tax demands up to certain thresholds for specific periods, benefiting a large number of taxpayers.
GST and Indirect Taxes
GST is lauded for reducing compliance burdens and unifying the indirect tax regime. Indirect tax reforms have led to an increased tax base and collection, benefiting both industry and consumers.
White Paper on Indian Economy
The government plans to release a white paper to assess the progress made in the economy since 2014, aimed at drawing lessons from past experiences and charting a future course.
Conclusion To The Interim Union Budget 2024-2025
In conclusion, India’s Interim Union Budget for 2024-2025 epitomizes a judicious blend of fiscal discipline, inclusive growth,
- and targeted interventions to address key challenges while fostering economic development and welfare.
We are all surrounded by money, and finance is an inherent part of our life.
- We must understand what is finance.
- And with the power of budgeting build a better financial future.
As the nation strides forward on its path to prosperity, this budget serves as a lodestar,
- guiding India towards a future defined by resilience, welfare, and sustainable development.
