The Union budget for 2024–25 is strategically focused on key sectors and initiatives. It prioritises employment, skilling, MSMEs, and the middle class. It presents a comprehensive plan to address nine crucial priorities: boosting agricultural productivity, enhancing human resources, advancing social justice, and investing in manufacturing, services, urban development, energy security, and infrastructure.
For FY 2024-25, the Budget Estimates (BE) forecast total expenditure at Rs 48.2 lakh crore, including a significant capital expenditure of Rs.11.11 lakh crore.
Total receipts, excluding borrowings, are expected to be Rs.32.07 lakh crores, and net tax receipts are projected at Rs 25.83 lakh crores. The fiscal deficit for 2024–25 is estimated at 4.9% of GDP, a 0.7% reduction from the 5.6% deficit reported in the provisional figures for 2023–24, showcasing progress in fiscal consolidation.
Budget breakdown
For the year 2024–25, every 100 rupees earned will break down as follows: Rs17 from corporation tax, Rs.19 from income tax, Rs 4 from customs, Rs 5 from union excise duties, Rs 18 from goods & services tax and other taxes, Rs 9 from non-tax receipts, Re 1 from non-debt capital, and Rs 27 from borrowings and other liabilities. Similarly, for every 100 rupees spent, allocations are Rs 8 for centrally sponsored schemes, Rs 16 for central sector schemes (excluding capital outlay on defence and subsidies), Rs 19 for interest payments, Rs 8 for defence, Rs 6 for subsidies, Rs 9 for Finance Commission and other transfers, Rs.21 for state share of taxes and duties, Rs 4 for pensions, and Rs 9 for other expenditures.
In line with the focus areas of the 2024–25 budget, several initiatives are outlined. Key measures include three Employment Linked Incentive schemes:
Scheme A provides a one-month wage subsidy for first-time employees, benefiting up to 210 lakh youths annually.
Scheme B incentivises job creation in manufacturing, supporting 30 lakh new employees and their employers over four years.
Scheme C reimburses employers up to Rs 3,000 per month for EPFO contributions for each additional employee, aiming to create 50 lakh new jobs.
Additional measures focus on increasing women’s workforce participation, establishing working women’s hostels and crèches, and launching targeted skilling programmes. The Ministry of Labour and Employment budget is Rs 22,531 crore, an increase of Rs.10,000 crore from the revised budget of 2023–24.
The increased budget is allocated to the new employment generation scheme. Similarly, for the Ministry of Skill Development and Entrepreneurship, a budget of Rs.1,000 crores is allotted to upgrade the new Industrial Training Institute scheme.
Support for MSMEs includes the launch of a new Credit Guarantee Scheme for securing loans for machinery without collateral, a new credit assessment model based on digital footprints, expanded Mudra loan limits, updated TReDS onboarding criteria, new SIDBI branches in MSME clusters, and E-Commerce Export Hubs for global market access. The budget allocation for the Ministry of Micro, Small, and Medium Enterprises remains the same as that allocated for 2023–24.
Allocations for existing schemes, including the Prime Minister Employment Generation Programme, credit support programme both catering to micro and small industries, and Guarantee Emergency Credit Line facility to eligible MSME borrowers, have been reduced in total by Rs.5,346 crores.
PM Vishwakarma, an initiative launched in 2023–24, has been allotted Rs.4,824 crores and will support traditional artisans with recognition, credit, skill upgrades, and marketing. Additionally, Rs 450 crore is allotted to expand technology centres nationwide and Rs 260 crore for the Scheme for Fund for Regeneration of Traditional Industries, which will help traditional industries enhance product value and income.
Similarly, in the other focus area for the middle class, the budget also invests Rs.10 lakh crore under PM Awas Yojana Urban 2.0 to address housing needs for 1 crore urban families, with Rs 2.2 lakh crore in central assistance. Social security benefits are enhanced by increasing NPS contributions from 10% to 14% of salaries. In the new tax regime, standard deductions for salaried employees and family pensions are increased, potentially saving up to Rs.17,500 in taxes.
A notable increase in allocation (143%) is observed for the Ministry of New and Renewable Energy. Of the increase, Rs 6,250 crore is allotted to PM Surya Ghar Muft Bijli Yojana, which will be used to install rooftop solar plants to enable 1 crore households to obtain free electricity up to 300 units every month. This increase highlights the government’s continuing emphasis on utilising renewable energy.
Overall, the budget has put more focus on what has been long discussed as vital issues: employment and skill development. Only time will tell how efficiently funds are being utilised and if they are translating to the outcome as expected. However, what seems to be missing is that the budget speech included talks about granting flood assistance to the states of Assam, Himachal Pradesh, Uttarakhand, and Sikkim.
However, there is absolute silence on any assistance for the floods or the ongoing ethnic violence in Manipur over the past 14 months. Also, while there is talk of improving data governance, collection, processing, and management of data and statistics, the budget allotted for census surveys under the Ministry of Home Affairs is only Rs 1,280 crores. Comparing this amount to Rs 8,754 crore—the amount approved by the Union Cabinet meeting in 2019 for conducting the census—it looks like the much-needed updated census, which forms the basis for several welfare schemes, will be delayed further.
Apoorva Ramachandra is a Research Associate at the Centre for Development Policy and Practice. She has a Master’s degree in Economics from the Jindal School of Government and Public Policy. Her areas of research include development economics, education, and gender.
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