Budget highlights: Good news on fiscal deficit, infra, SHGs, green energy…and more

Virendra Pandit

New Delhi: The following are the key takeaways from the Interim Budget 2024 that Finance Minister Nirmala Sitharaman tabled in Parliament on Thursday.

The Interim Union Budget for the financial year 2024-25 focused on fiscal consolidation, infrastructure, agriculture, green growth, and railways. However, no changes were made in the tax rates, disappointing salaried people.

The fiscal deficit target for FY25 was set at 5.1 percent of the GDP, better than expected, while the FY24 target was also revised down to 5.8 percent. The CAPEX target of FY25 has increased by 11.1 percent to Rs. 11.1 lakh crore.

The next 5 years will be years of unprecedented development and to realize the goal of becoming a developed country by 2047, Sitharaman said, adding the “trinity of democracy, demography, and diversity can fulfill aspirations of every Indian.”

While no changes in the tax regime, the FM announced that over the last 10 years, tax collections have more than doubled and the average processing time of tax returns was reduced to 10 days this year.

She also announced that 40,000 normal train bogies will be converted to Vande Bharat to enhance the safety, convenience, and comfort of passengers. Key rail infrastructure projects, including Metro Rail and Namo Bharat, will be expanded to more cities.

The FM also announced three major railway corridors– the port connectivity corridor, the energy, mineral, and cement corridor, and the high traffic density corridor. The decongestion of the high-traffic corridors will also help in improving the operations of passenger trains, resulting in safety and higher travel speed for passengers.

Together with dedicated freight corridors, these three economic corridors will accelerate GDP growth and reduce logistic costs.

Sitharaman said 83 lakh self-help groups(SHGs) with nine crore women are transforming the rural socio-economic landscape with empowerment and self-reliance. Their success has assisted nearly one crore women to become ‘Lakhpati Didi.’ Now this target will be enhanced to cover 3 crore SHGs.

Through roof-top solar power panels, 10 million households will be enabled to obtain up to 300 units of free electricity every month. This scheme follows PM Modi’s resolve on January 22 after the consecration of the Shri Ramlalla Mandir in Ayodhya. This will help save up to Rs. 15,000-18,000 annually for households who will get free solar electricity and sell the surplus to the local power distribution companies, Sitharaman pointed out.

She said the FDI inflows during 2014-23 were USD 596 billion, which was double that of the 2005-13 period. To encourage sustained foreign investment, the government is negotiating bilateral investment treaties with foreign partners, in the spirit of ‘first develop India.’

To encourage research and development in sunrise domains in science and technology, she announced a corpus of Rs. one lakh crore with a fifty-year interest-free loan to provide long-term financing or refinancing with long tenors and low or zero interest rates. This will encourage the private sector to scale up innovation significantly.

In the health sector, Sitharaman said the Ayushman Bharat scheme will cover all Anganwadi and Asha workers and added that all maternal and child healthcare schemes will be brought under one comprehensive scheme.

Other highlights are:

* The fiscal deficit for the first nine months of FY24 until December 2023 stood at Rs. 9.82 lakh crore or 55 percent of annual estimates.

* The capital expenditure in FY25 was set at Rs. 11.1 lakh crore, up 11.1 percent.

* The total expenditure is expected at Rs. 30.80 lakh crore. The revised estimate of the total expenditure for FY24 is Rs. 44.90 lakh crore.

* The revenue receipts for FY24 at Rs.30.03 lakh crore are expected to be higher than the Budget estimate, reflecting strong growth momentum and formalization in the economy.

* FY25 gross market borrowing pegged at Rs. 14.13 lakh crore, net borrowing at Rs. 11.75 lakh crore, and

* FY25 gross tax receipt target at Rs. 26.02 lakh crore.