New Delhi: Finance Nirmala Sitharaman presented the last (interim) Union Budget 2024-25 in Parliament on Thursday before the country goes to Lok Sabha polls. The stop-gap financial plan, will come into effect on April 1 until a new government is formed.
With the government continued focus on building infrastructure, Sitharaman said the government would build 20 million affordable houses in the next five years in addition to the nearly 30 million houses built already.
No new tax relief measures announced for the salaried middle class and PM Narendra Modi’s pre-election spending plan also refrained from announcing big increases in social schemes.
The Bharatiya Janata Party (BJP) is anticipated to maintain its political dominance, backed by victories in three state elections last year and Prime Minister Modi’s enduring popularity.
Despite this, concerns have risen over insufficient allocations for health and education, challenging the government’s populist agenda.
Dr. Raghuram Rajan, former governor of the Reserve Bank of India (RBI), while speaking with BBC emphasised the need for a more balanced focus on nurturing “human capital” alongside the existing emphasis on physical infrastructure development in the country.
“There has not been enough attention paid to creating “human capital” in India, which is worrying given the country’s unemployment crisis,” he said.
Ministry-wise allocations
In the Interim Union Budget 2024, unsurprisingly, the government allocated nearly Rs 6 lakh crore to Ministry of Defence, which amount to 13 per cent – biggest sector-wise allocation – of the total Budget. This includes capital outlay of 1.6 lakh crore.
Here are the allocations for specific ministries:
Key highlights of the Budget 2024-25
On Infrastructure, Sitharaman said that the capital expenditure outlay for infrastructure development and employment generation will be increased by 11.1 per cent to Rs 11,11,111 crore, which will be 3.4 per cent of the GDP.
On reforms in the states for ‘Viksit Bharat’, she said that a provision of Rs 75,000 crore rupees as a fifty-year interest-free loan has been proposed to support milestone-linked reforms by the state governments.
She said that three major economic railway corridor programmes identified under PM Gati Shakti will also be implemented to improve logistics efficiency and reduce the cost of energy, mineral and cement corridors, port connectivity corridors, and high traffic density corridors.
“Forty thousand normal rail bogies will also be converted to Vande Bharat standards,” she said.
About the aviation sector, she said that the number of airports in the country have doubled to 149 airports. “Five hundred and seventeen new routes are carrying at least 1.3 crore passengers. We have also placed orders for over 1000 new aircrafts,” she said.
On ‘Garib Kalyan, Desh ka Kalyan’, she said that the government has assisted 25 crore people out of multi-dimensional poverty in the last 10 years.
“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 provided credit assistance to 78 lakh street vendors. At least 2.3 lakh have received credit for the third time,” she said.
On welfare of ‘Annadata’, she said that the PM-Kisan Samman Yojana has provided financial assistance to 11.8 crore farmers.
“Under PM Fasal BimaYojana, crop insurance has been given to 4 crore farmers,” she said. She said that Electronic National Agriculture Market (e-NAM) has integrated 1361 mandis, providing services to 1.8 crore farmers with a trading volume of Rs 3 lakh crore.
On Nari Shakti, she said that 30 crore Mudra Yojana loans have been given to women entrepreneurs. “Female enrolment in higher education has gone up by 28 per cent,” she said.
She said that in STEM courses, girls and women constitute 43 per cent of enrolment which is one of the highest in the world.
“Over 70 per cent houses — under PM Awas Yojana — have been given to women from rural areas,” she said.
On PM Awas Yojana (Grameen) she said that despite COVID challenges, the target of three crore houses under PM Awas Yojana (Grameen) will be achieved soon.
“At least two crore more houses will be taken up in the next five years,” she said.
She also mentioned rooftop solarisation and “muft bijli”, saying that 1 crore households will obtain 300 units free electricity every month through rooftop solarisation.
“Each household is expected to save Rs 15,000 to Rs 18,000 annually due to rooftop solarisation,” she said.
On Ayushman Bharat, she said that healthcare cover under Ayushman Bharat scheme will be extended to all ASHA workers, Anganwadi workers and helpers.
On agriculture and food processing, the Finance Minister said that Pradhan Mantri Kisan Sampada Yojana has benefitted 38 lakh farmers and generated at least 10 lakh employment.
“Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana has assisted 2.4 lakh SHGs and 60000 individuals with credit linkages,” she said.
“A corpus of Rs 1 lakh crore will be established with fifty-year interest free loan to provide long-term financing or refinancing with long tenors and low or nil interest rates,” she mentioned about research and innovation for catalysing growth, employment and development.
Interim Budget gives big push to tourism, states to get long-term loans
Sitharaman rolled out a scheme for the comprehensive development of tourist centres in the country as part of the Interim Budget proposals.
Sitharaman said that states will be encouraged to take up comprehensive development of iconic tourist centres, branding and marketing them at a global scale. She further added that long-term interest free loans will be provided to states for financing such development on a matching basis.
In order to promote comprehensive development of the centres, the Minister said that a framework for rating of the centres based on quality of facilities and services will be established.
The Finance Minister highlighted the fact that India’s middle class also now aspires to travel & explore; and tourism, including spiritual tourism, has tremendous opportunities for local entrepreneurship.
In continuation to this, she said that to address the emerging fervour for domestic tourism, projects for port connectivity, tourism infrastructure, and amenities will be taken up on the islands, including Lakshadweep and this will help generate employment.
Interim Budget seen as neutral to mildly positive for equities
The impact of the Interim Budget on equity markets will be neutral to mildly positive for the near term and other emerging triggers will drive its trajectory later, HDFC Securities MD & CEO Dhiraj Relli said.
The FY25 interim Budget has come out better than expected even though the heightened expectations on many changes/giveaways have rightfully not been met now, he said.
The resolve to continue fiscal consolidation path will be appreciated by global and local investors. Better than street expectations of fiscal deficit for FY24 and FY25 and the consequent lower borrowings target in FY25 has enthused the bond markets. Announcements on Rail infra spend and 11.1 per cent rise in overall capex would be in line with most expectations, he added.
(With inputs from agencies)
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