February 2, 2024
NEW DELHI – Finance Minister Nirmala Sitharaman on Thursday presented the Union Interim Budget, 2024-25 in the Lok Sabha, proposing no changes in direct or indirect taxes, and expressing confidence the Government, based on its stupendous work, will be “blessed again by the people with a resounding mandate” in this year’s general elections.
The Interim Budget makes provisions for financial resources to meet Government expenditure till the end of General Elections. Amidst thumping of desks, Mrs Sitharaman announced: “I propose to retain the same tax rates for direct and indirect taxes including import duties.”
As per the First Advance Estimates of National Income of FY 2023-24, presented along with the Finance Minister’s speech, India’s Real GDP is projected to grow at 7.3 per cent.
The Finance Minister said when the Narendra Modi government took office in 2014, the country faced enormous challenges. “With ‘Sabka Saath, Sabka Vikas’ as its ‘mantra’, the Government overcame those challenges in right earnest,” introducing structural reforms, Ms Sitharaman said. The Government will come out with a White Paper on how the challenges were met.
The Finance Minister introduced the Finance Bill, 2024 and said she will be seeking ‘vote on account’ approval of Parliament through an Appropriation Bill for a part of the financial year 2024-25.
She said as the fruits of development reached people, the Government got a bigger mandate in 2019 for its second term. Development programmes in the last 10 years targeted each and every household and individual, through ‘housing for all’, ‘har ghar jal’, electricity for all, cooking gas for all, bank accounts and financial services for all, in record time, the Finance Minister said.
The trinity of demography, democracy and diversity backed by ‘Sabka Prayas’ has the potential to fulfil aspirations of every Indian, she said. Guided by the principle ‘Reform, Perform, and Transform’, the Government will take up next generation reforms, and build consensus with the states and stakeholders for effective implementation.
The Government is working with an approach to development that is all-round, all-pervasive and all-inclusive. It covers all castes and people at all levels. “We are working to make India a Viksit Bharat by 2047. For achieving that goal, we need to improve people’s capability and empower them,” she said.
The Minister said “Our Government will pay utmost attention to make the eastern region and its people a powerful driver of India’s growth.
Ms Sitharaman announced the Government will form a high-powered committee for an extensive consideration of the challenges arising from fast population growth and demographic changes and the committee will recommend how to address these challenges in relation to the goal of Viksit Bharat.
The Finance Minister said “We believe in empowering the poor. The earlier approach of tackling poverty through entitlements had resulted in very modest outcomes. When the poor become empowered partners in the development process, government’s power to assist them also increases manifold.”
She said “Our Government has provided transparent, accountable, people-centric and prompt trust-based administration with ‘citizen-first’ and ‘minimum government, maximum governance’ approach.”
The Finance Minister said the impact of all-round development is discernible in all sectors. “There is macro-economic stability, including in the external sector. Investments are robust. The economy is doing well.” Average real income of the people has increased by 50 per cent. Inflation is moderate, she said.
As the Prime Minister believed, she said, “we need to focus on four major castes. They are, ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’ (Farmer). Their needs, their aspirations, and their welfare are our highest priority.”
“The country progresses, when they progress. All four require and receive government support in their quest to better their lives. Their empowerment and well-being will drive the country forward,” she said.
With the pursuit of ‘Sabka ka Saath’ in these 10 years, the Government assisted 25 crore people get freedom from multi-dimensional poverty. “Our vision for ‘Viksit Bharat’ is that of Prosperous Bharat in harmony with nature, with modern infrastructure, and providing opportunities for all citizens and all regions to reach their potential,” she said.
The Minister said Direct Benefit Transfers of Rs 34 lakh crore from the Government using PM-Jan Dhan accounts led to savings of Rs 2.7 lakh crore for the Government. DBT facilitated avoidance of leakages prevalent earlier. The savings have helped in providing more funds for ‘Garib Kalyan’.
The farmers are “our Annadata,” she said. Under the PM-KISAN SAMMAN Yojana, the government is giving direct financial assistance to 11.8 crore farmers, including marginal and small farmers. Crop insurance is given to four crore farmers under PM Fasal Bima Yojana.
“Our prosperity depends on adequately equipping and empowering the youth,” she said. The Skill India Mission has trained 1.4 crore youth, upskilled and reskilled 54 lakh youth, and established 3000 new ITIs.
The PM Mudra Yojana sanctioned 43 crore loans aggregating Rs 22.5 lakh crore for entrepreneurial aspirations of the youth. Besides that, the Fund of Funds, Start Up India, and Start Up Credit Guarantee schemes are assisting the youth. “They are also becoming rozgardata,” she said.
Mrs Sitharaman said “Despite the challenges due to Covid, implementation of PM Awas Yojana Rural continued and we are close to achieving the target of three crore houses. Two crore more houses will be taken up in the next five years to meet the requirement arising from increase in the number of families.”
Previously, social justice was mostly a political slogan. “For our Government, social justice is an effective and necessary governance model. The saturation approach of covering all eligible people is the true and comprehensive achievement of social justice. This is secularism in action, reduces corruption, and prevents nepotism,” she said.
The Finance Minister said States will continue to get interest free loans of Rs 1.3 lakh crore for Capex. Private investments are happening again, and so the government will provide larger credit to the private sector.
She said over the last 10 years, direct tax collections trebled and tax-return filers swelled 2.4 times. The additional resources were spent on public welfare schemes, she said.
The Government introduced new tax schemes under which there is no tax liability up to Rs 7 lakh, raised from Rs 2.20 lakh in 2013-14. The threshold for presumptive taxation for retail businesses was increased from Rs 2 crore to Rs 3 crore.
The Finance Minister said in the last five years, the focus was to improve tax-payer services. The age-old jurisdiction-based assessment system was replaced by Faceless Assessment and Appeal, thereby imparting greater efficiency, transparency and accountability.
By unifying the highly fragmented indirect tax regime in India, GST was introduced and it reduced compliance burden on trade and industry. The industry has acknowledged the benefits of GST.
During 2024-25, total receipts (other than borrowings) and total expenditure are estimated at Rs 30.80 lakh crore and Rs 47.66 lakh crore, respectively. The tax receipts are estimated at Rs 26.02 lakh crore.
“We continue on the path of fiscal consolidation, as announced in my Budget Speech for 2021-22, to reduce fiscal deficit below 4.5 per cent by 2025-26. The fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP, adhering to that path,” the Finance Minister said.
During the current financial year (2023-24), the revised estimate of the fiscal deficit is 5.8 per cent of GDP, improving on the budget estimate, notwithstanding moderation in the nominal growth estimates, she said.
The Revised Estimates of the total receipts other than borrowings is Rs 27.56 lakh crore, of which the tax receipts are Rs 23.24 lakh crore during the current FY. The revised estimate of the total expenditure is Rs 44.90 lakh crore.