India's Interim Budget 2024: A Neutral Perspective on Fiscal Policies and Development Initiatives

By IndraStra Global Editorial Team

Cover Image Attribute: India's Finance Minister Nirmala Sitharaman and her team pose for photos while departing the Finance Ministry Office to present the annual budget in New Delhi on February 1, 2024./Source: Sajjad Hussain | Afp | Getty Images

Against the backdrop of the forthcoming Lok Sabha elections, Union Finance Minister Nirmala Sitharaman delivered the Interim Budget 2024. This event served to set the stage for the political process. During the sixth straight budget presentation that Sitharaman has given, there was a striking absence of populist measures. Instead, the status quo on tax rates for both direct and indirect taxes was maintained. At the same time that she was laying out the fiscal blueprint for the next five years, the Minister of Finance forecasted exceptional growth. She also revealed a healthy capital expenditure of Rs 11.1 lakh crore for the next fiscal year, which is an increase of 11 percent over the current fiscal year.

Taxation and the Responsibility of the Government

With the intention of demonstrating budgetary responsibility, the Minister of Finance abstained from making any changes to the tax rates, ensuring that both direct and indirect taxes remained unchanged. Sitharaman also extended tax advantages for start-ups and investments made by sovereign wealth funds until March 31, 2025. This extension was made possible by Sitharaman. It is projected that around one crore taxpayers will benefit from the government's commitment to enhancing taxpayer services and the withdrawal of old challenged direct tax claims.
The Minister of Finance emphasized the beneficial effects of tax reforms, which include expanding the tax base and raising the amount of money collected. Included among the noteworthy accomplishments is the reduction in the amount of time required to process tax returns, which went from 93 days in FY14 to just 10 days. Not only has the number of people filing taxes increased by 2.4 times, but the tax base for the Goods and Services Tax (GST) has increased by more than twice as much. Direct tax collections have increased by a factor of three over the course of the past decade, and it is anticipated that they will amount to Rs 26.02 lakh crore in 2024-25.

Sectors of the Economy

With regard to the field of technology, Sitharaman suggested the establishment of a considerable corpus of one lakh crore in order to encourage private investment in new technologies. With the implementation of Ayushman Bharat, the provision of healthcare services is going to be expanded to include all Aasha workers and Aanganwadi workers. Additionally, there are plans to create hospitals in every district. Saksham Anganwadi and Poshan 2.0 are two examples of accelerated efforts that highlight the government's commitment to enhancing nutrition delivery, early childhood care, and development. The government has also implemented a vaccine campaign against cervical cancer for females between the ages of 9 and 14 years old.
The education budget for 2024/25 was 1.25 lakh crore, reflecting a considerable increase of 14.5 percent from the revised projection for 2023/24.

Inclusive growth, housing, and renewable energy are all important.

A new housing plan for the middle class was presented in the budget, with the objective of constructing two crore residences as part of the Prime Minister's Aavas Yojana. A number of announcements were made about the renewable energy sector, including money to fill the viability gap for wind energy, the creation of coal gasification and liquefaction capacity, and the gradual required blending of compressed biogas, compressed natural gas, and compressed natural gas. The importance of providing financial help for the acquisition of machinery for the aggregation of biomass was also emphasized.
During the next five years, the Finance Minister anticipated that India would see unparalleled growth, particularly emphasizing the eastern region becoming the primary driver of India's economic expansion. By implementing the new solar power program, the government intends to make 300 units of free power available to more than one crore households. Clearly, the government was committed to empowering women, as seen by the increased objective for Lakhpati Didi and the provision of loan support to 78 lakh street sellers under the PM-SVANidhi program.

Milestones and Obstacles in the Development Process

During the beginning of the Interim Budget session, President Droupadi Murmu delivered a speech to a joint session of the Lok Sabha and the Rajya Sabha. In her speech, she highlighted the Modi government's accomplishments over the previous ten years. The Indian economy, which was long considered to be one of the "fragile five," has had considerable growth, which may be ascribed to the numerous reforms that were implemented by the government during this time period. A number of significant milestones were highlighted, such as the construction of the New Parliament, the introduction of high-speed trains, the successful landing on the moon, the opening of the Ram Mandir, and the elimination of Article 370.
The comprehensive union budget will be revealed after the elections that are planned to take place in April and May. Conversely, the interim budget serves as a provisional financial plan that addresses pressing needs. With the intention of conforming to the practice of interim budgets, the budget abstained from making policy announcements that were particularly ground-breaking. 

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