The India Budget 2024-25, unveiled by Finance Minister Nirmala Sitharaman, represents a comprehensive effort to steer the nation towards sustained economic growth and stability. With a keen focus on fiscal prudence, infrastructure development, green energy, and social welfare, the budget aims to address multiple facets of the economy while maintaining a disciplined fiscal approach. Here, we delve into the key highlights and priorities outlined in this pivotal budget.
Fiscal Consolidation and Deficit Reduction
A cornerstone of the 2024-25 budget is fiscal consolidation. The government has set a fiscal deficit target of 5.1% of GDP for FY25, with a roadmap to further reduce it to 4.5% by FY26 (mint) (NEXT IAS). This marks a significant commitment to fiscal discipline, ensuring that public finances remain sustainable while supporting economic growth. The revised target for FY24 has also been brought down to 5.8%, reflecting a more conservative approach to public spending.
Infrastructure Development
Infrastructure continues to be a critical focus area, with a substantial increase in capital expenditure. The budget has allocated ₹11.1 lakh crore for infrastructure projects, representing an 11.1% increase from the previous year (mint). This investment aims to bolster economic growth through large-scale projects in transportation, urban development, and logistics.
One of the standout initiatives is the conversion of 40,000 rail bogies to Vande Bharat coaches, which is expected to enhance the safety, convenience, and comfort of railway passengers (mint). Additionally, the expansion of metro rail networks to more cities and the development of key railway corridors, such as the port connectivity corridor and the high-traffic density corridor, are poised to reduce logistical costs and improve the efficiency of passenger and freight transportation.
Green Energy and Sustainability
In line with India’s commitment to achieving net-zero emissions by 2070, the budget has introduced several measures to promote green energy (NEXT IAS) (EY US). These include viability gap funding for renewable energy projects and incentives for the adoption of electric vehicles. The government aims to facilitate the rooftop solarization of 10 million households, providing up to 300 units of free electricity per month. This initiative not only supports the transition to renewable energy but also offers significant savings for households, potentially amounting to ₹15,000-18,000 annually.
Agriculture and Rural Development
The budget also places significant emphasis on agriculture and rural development. One of the key proposals is the easing of export restrictions on agricultural products such as rice, wheat, and sugar (NEXT IAS). This move is expected to boost rural incomes and support farmers by providing them with better access to international markets.
To further enhance rural development, the government has expanded the “Lakhpati Didi” scheme, aiming to uplift the economic status of rural women through self-help groups (SHGs). The target has been increased from 2 crore to 3 crore beneficiaries, reflecting the scheme’s success in empowering rural women (mint).
Employment and Skill Development
Addressing the issue of unemployment, the budget introduces several incentives for job creation in sectors like textiles and tourism (NEXT IAS). The government plans to launch a new Labour Welfare and Employment Index to promote uniform labor standards across states, fostering a healthier and more competitive labor market. This initiative is expected to not only create jobs but also improve labor conditions nationwide.
Taxation
Taxation remains a critical aspect of the budget, although no changes were made to tax rates for the current year. The Finance Minister highlighted the significant increase in tax collections over the past decade, which have more than doubled (mint). The reduction in the average processing time for tax returns to just 10 days this year was also noted, reflecting improved efficiency in the tax administration.
Furthermore, there are calls for simplification of the Goods and Services Tax (GST) and capital gains tax systems. These reforms aim to create a more predictable business environment, attract investment, and enhance overall economic activity (mint) (EY US).
Social Welfare Programs
The budget extends its support to social welfare programs, notably expanding the “Lakhpati Didi” scheme to include more beneficiaries. This program provides financial assistance to women in rural areas, helping them achieve self-reliance and improve their socio-economic status (mint).
Additionally, the budget includes provisions for enhancing the reach of social welfare schemes aimed at improving healthcare, education, and housing for marginalized communities. These measures are designed to create a more inclusive society and ensure that the benefits of economic growth reach all segments of the population.
Tourism and Logistics
Recognizing the potential of tourism to drive economic growth, the budget allocates significant resources to boost domestic tourism (mint). Investments in tourism infrastructure, including the development of new tourist destinations and the promotion of cultural heritage sites, are expected to attract more visitors and create jobs.
In the logistics sector, the development of dedicated freight corridors and economic rail corridors is anticipated to enhance the efficiency of freight movement, reduce transportation costs, and support manufacturing competitiveness (mint).
Conclusion
The India Budget 2024-25 is a forward-looking document that addresses multiple aspects of the economy with a balanced approach to growth and fiscal responsibility. By focusing on infrastructure development, green energy, agriculture, employment, and social welfare, the budget aims to create a resilient and inclusive economy. The measures announced are expected to foster sustainable growth, improve living standards, and position India as a competitive player on the global stage.