On Thursday, February 1, Finance Minister Nirmala Sitharaman delivered her Budget speech, unveiling the Interim Budget 2024-25 in Parliament a day after the commencement of the Budget Session. In Modi’s final budget before elections, FM Nirmala Sitharaman set the disinvestment target for FY25 at ₹50,000 crore in the revised estimates, with the revised estimate for disinvestment mop-up in FY24 pegged at ₹30,000 crore. The Finance Minister also announced the addition of 2 crore more houses under the Pradhan Mantri Awas Yojana – Gramin (PMAY-G).
As it’s the last one before the Lok Sabha elections, it is an interim budget. No changes to tax slabs were introduced in the budget 2024. Meanwhile, the fiscal deficit target for 2024-25 (FY25) was set at 5.1% of the gross domestic product (GDP). The next ‘full budget’ will be presented in July, once a new government has been sworn in after the Lok Sabha elections.
Budget 2024-25 Highlights
- In the budget 2024, the government has revised the fiscal deficit for 2023-24 (FY24) to 5.8% of the GDP, while targeting a fiscal deficit of 5.1% of GDP for FY25, aiming to reduce it below 4.5% in 2025-26 (FY26).
- No changes to income tax slabs have been implemented.
- In her interim Budget speech in Parliament, Sitharaman announced, “I propose to extend the date to 31.03.2025 for certain tax benefits to startups and investments made by sovereign wealth or pension funds, as well as tax exemption on certain income of some IFSC units, to provide continuity in taxation. The current expiration date for these benefits is 31.03.2024.”
- In a significant announcement, the government decided to withdraw outstanding direct tax demands up to Rs 25,000 for the period up to the financial year 2009-10 and up to Rs 10,000 for the financial years 2010-11 to 2014-15.
- The number of tax filers has increased by 2.4 times, and direct tax collection has tripled since 2014, with tax receipts projected at Rs 26.02 lakh crore in 2024-25.
- The Finance Minister announced the addition of 2 crore more houses in the next 5 years under the Pradhan Mantri Awas Yojana – Gramin (PMAY-G).
- A corpus of Rs 1 lakh crore will be established for tech-savvy youth, providing a 50-year interest-free loan to encourage research and innovation in sunrise domains by the private sector.
- A new scheme will be launched for strengthening deep tech technology for defence purposes.
- Plans are in place to set up more medical colleges through the utilization of existing hospital infrastructure under various departments.
- Legislative measures such as making triple talaq illegal, reserving 1/3rd of seats for women in Lok Sabha and state assemblies, and allocating over 70% of houses under PM Awas Yojana in rural areas to women have been implemented to enhance their dignity.
- Through rooftop solarization, 1 crore households will be enabled to obtain up to 300 units of free electricity every month, aligning with the government’s aim to achieve ‘net zero’ by 2070.
- Long-term interest-free loans will be provided to states to encourage tourism development.
- Finance Minister Sitharaman highlighted the positive transformation in the Indian economy over the last 10 years, emphasizing the government’s focus on the needs and aspirations of the poor, women, youth, and farmers for the country’s growth.
- The government is working towards making India ‘Viksit Bharat’ by 2047, with a focus on ‘sabka sath, sabka vikas.’
- The government is equally focused on GDP, emphasizing Governance, Development, and Performance.
- In a review report, the Ministry of Finance projected that the Indian economy is likely to grow at over 7% in the coming years and become the third-largest economy globally in the next three years, with a GDP of $5 trillion.
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