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Interim Union Budget 2024-25: Finance Minister Nirmala Sitharaman presented her sixth Union Budget 2024-25 on February 1, 2024. It is an interim budget before the upcoming general elections later this year. The Interim Union Budget 2024-25 aimed at empowering youth and women, ensuring fiscal stability, and sustaining capital expenditure. Sitharaman revised the fiscal deficit target for FY25 to 5.1% of the GDP. No alterations were made to the existing direct and indirect tax rates. Read the article for the Union budget 2024 25 Summary.
What is the Union Budget?
Article 112 of the Indian Constitution designates the Union Budget as the Annual Financial Statement (AFS). This statement outlines the anticipated receipts and expenditures of the Government for a Financial Year commencing on April 1 of the current year and concluding on March 31 of the subsequent year. In essence, the Budget contains:
- Estimates of revenue and capital receipts,
- Strategies to generate revenue,
- Projections of expenditure,
- Comprehensive details of the actual receipts and expenditures from the concluding financial year, along with reasons for any deficit/surplus,
- Economic and financial policy for the upcoming year, including taxation proposals, revenue prospects, spending programs, and the initiation of new schemes/projects.
In terms of the budget, the Election Commission of India receives allocations to carry out its crucial functions. These funds cover various aspects, including the organization of elections, maintenance of electoral rolls, implementation of technology for efficient voting processes, and ensuring the overall integrity of the electoral system. The budgetary provisions aim to support the Commission in upholding the democratic principles and conducting free and fair elections in India.
Interim Union Budget 2024-25 Summary
Following the idea of ‘Sabka Saath, Sabka Vikas, and Sabka Vishwas,‘ and the united effort of “Sabka Prayas,” the Finance Minister, Smt. Nirmala Sitharaman shared the critical points of the Interim Union Budget 2024-25 in Parliament on Feb 1, 2024. Here are the main highlights in simple terms:
Social Justice Initiatives
| Focus Area | Details |
| Inclusive Priorities | The Prime Minister prioritizes helping the Poor, Women, Youth and Farmers. Slogan: “Garib Kalyan, Desh ka Kalyan.” |
| Poverty Alleviation | The Government has helped 25 crore people out of multi-dimensional poverty in the last 10 years. Direct Benefit Transfer (DBT) of Rs. 34 lakh crore through PM-Jan Dhan accounts, saving Rs. 2.7 lakh crore for the Government. |
| Empowering Vendors | PM-SVANidhi provides credit assistance to 78 lakh street vendors, with 2.3 lakhs receiving credit for the third time. |
| Tribal Development | PM-JANMAN Yojana focuses on the development of vulnerable tribal groups (PVTG). |
| Artisan Support | PM-Vishwakarma Yojana provides support to artisans and craftspeople in 18 trades. |
Welfare of Farmers
| Initiative | Details |
| Financial Assistance | PM-KISAN SAMMAN Yojana provides financial assistance to 11.8 crore farmers. PM Fasal Bima Yojana ensures crop insurance for 4 crore farmers. Electronic National Agriculture Market (e-NAM) integrates 1361 mandis, serving 1.8 crore farmers with a trading volume of Rs. 3 lakh crore. |
Empowerment of Women
| Focus Area | Details |
| Entrepreneurship Support | Women entrepreneurs received loans totalling 30 crores under the Mudra Yojana. |
| Education and Housing | Female enrollment in higher education increased by 28%. Girls and women account for 43% of all STEM course enrollment. Over 70% of houses under PM Awas Yojana are allocated to women in rural areas. |
| Rural Housing Development | Despite COVID problems, the aim of three crore dwellings under the PM Awas Yojana (Grameen) will be met soon. An additional two crore houses are planned for the next five years. |
| Rooftop Solarization | 1 crore households receive 300 units of free electricity monthly through rooftop solarization, saving Rs.15,000 to Rs.18,000 annually. |
Health Care Initiatives
| Initiative | Details |
| Ayushman Bharat | Healthcare cover under the Ayushman Bharat scheme extended to all ASHA workers, Anganwadi Workers, and Helpers. |
Agriculture and Food Processing
| Initiative | Details |
| Farmers’ Welfare | Pradhan Mantri Kisan Sampada Yojana benefits 38 lakh farmers and generates 10 lakh employment. Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana assists 2.4 lakh SHGs and 60,000 individuals with credit linkages. |
Research and Innovation
| Focus Area | Details |
| Investment in Innovation | A corpus of Rs.1 lakh crore is to be established with a fifty-year interest-free loan to catalyze growth and development. A new scheme to strengthen deep-tech technologies for defense and promote self-reliance. |
Infrastructure Development
| Focus Area | Details |
| Capital Expenditure | Capital expenditure outlay for infrastructure development and employment generation increased by 11.1% to Rs.11,11,111 crore, constituting 3.4% of GDP. |
| Railways | Implementation of three major economic railway corridor programs under the PM Gati Shakti to improve logistics. Conversion of 40,000 normal rail bogies to Vande Bharat standards. |
Aviation and Green Energy
| Initiative | Details |
| Aviation Expansion | The number of airports doubled to 149. 517 new routes carrying 1.3 crore passengers. Indian carriers order over 1000 new aircraft. |
| Green Energy Commitments | By 2030, the capacity for coal gasification and liquefaction will be 100 MT. Compressed biogas (CBG) must be blended in CNG for transportation and PNG for household use. |
Tourism and Investments
| Initiative | Details |
| Tourism Development | States to encourage the comprehensive development of iconic tourist centers. Framework for rating tourist centers based on quality established.
Long-term interest-free loans are provided to states for financing development. |
| Investments and Reforms | FDI inflow during 2014-23 of USD 596 billion, twice the inflow during 2005-14. Provision of Rs.75,000 crore as a fifty-year interest-free loan to support state-level reforms. |
Financial Overview
| Year and Figures | Details |
| Revised Estimates 2023-24 | Total receipts (other than borrowings) Rs.27.56 lakh crore, tax receipts Rs.23.24 lakh crore. Total expenditure Rs.44.90 lakh crore. Revenue receipts are Rs.30.03 lakh crore, and the fiscal deficit is 5.8% of GDP. |
| Budget Estimates 2024-25 | Total receipts (other than borrowings) Rs.30.80 lakh crore, tax receipts Rs.26.02 lakh crore. Fiscal deficit in 2024-25 is estimated at 5.1% of GDP. Gross and net market borrowings during 2024-25 are estimated at Rs.14.13 and Rs.11.75 lakh crore, respectively. |
Direct Taxes Overview
| Proposal | Details |
| Tax Rate Retention | FM proposes to retain the same tax rates for direct taxes. |
| Growth in Tax Collection and Filers | Direct tax collection tripled, return filers increased 2.4 times in the last 10 years. |
| Enhancing Taxpayer Services | The government is committed to improving taxpayer services. |
| Waiver of Outstanding Tax Demands | Outstanding direct tax demands up to Rs 25,000 for FY 2009-10 withdrawn. Outstanding demands up to Rs 10,000 for FY 2010-11 to 2014-15 withdrawn, benefiting one crore taxpayers. |
| Tax Benefits for Start-Ups and Investments | Tax benefits extended to start-ups. Investments by Sovereign wealth funds or pension funds extended to 31.03.2025. |
| Tax Exemption Extension | Tax exemption on certain income of IFSC units was extended to 31.03.2025 from 31.03.2024. |
Indirect Taxes and GST
| Proposal | Details |
| Retention of Tax Rates | FM suggests keeping import duties and indirect taxes at the current rates. |
| GST Implementation | GST unified the fragmented indirect tax regime. |
| GST Collection Growth | This year, the average monthly gross collection of GST more than doubled to Rs 1.66 lakh crore. The GST tax base also doubled. |
| State SGST Revenue Increase | State SGST revenue buoyancy increased to 1.22 post-GST from 0.72 pre-GST. |
| Positive Industry Perception of GST Transition | 94% of industry leaders view the transition to GST as largely positive.. |
| Benefits of GST Implementation | GST led to supply chain optimization, reduced compliance burden, and lowered logistics costs and taxes, benefiting consumers. |
Tax Rationalization and Achievements
| Tax Rationalization Efforts | Details |
| Progressive Threshold Changes | Income up to Rs 7 lakh is exempt from taxation, compared to Rs 2.2 lakh in FY 2013–14. The presumptive taxation threshold for retail businesses increased to Rs 3 crore from Rs 2 crore. Professionals’ presumptive tax threshold increased from Rs 50 lakh to Rs 75 lakh. |
| Corporate Tax Reforms | Corporate income tax was reduced from 30% to 22% for established domestic enterprises. The Corporate income tax rate is 15% for new manufacturing companies. |
Achievements in Taxpayer Services and Customs Reforms
| Achievements | Details |
| Efficient Processing | Average processing time of tax returns reduced to 10 days from 93 days in 2013-14. |
| Faceless Assessment and Appeal | Introduction of faceless assessment and appeal for greater efficiency. |
| Simplified Return Filing | Updated income tax returns, new form 26AS, and pre filled tax returns introduced for simplified filing. |
| Customs Reforms Leading to Reduced Import Release Time | Reduction by 47% to 71 hours at Inland Container Depots. Reduction by 28% to 44 hours at Air Cargo complexes. Reduction by 27% to 85 hours at Sea Ports. |
Economic Progress: Then and Now
| Key Focus Areas in 2014 | Results Achieved |
| Attract Investments | FDI inflow during 2014-23 of USD 596 billion, twice the inflow during 2005-14. |
| Support Reforms | Reforms in states with a provision of Rs.75,000 crore as a fifty-year interest-free loan. |
| Provide Hope to the People | Positive economic indicators and a strong belief in ‘nation-first’ governance. |
| Government’s White Paper Commitment | The government will present a White Paper on the nation’s economic journey. |
Union Budget 2024-25 FAQs
Will there be any changes in the income tax slabs for the financial year 2024-25?
There is no significant changes in the tax slab for the upcoming financial year, 2024-25 (April 1, 2024-March 31, 2025).
How much is the Union Budget 2024-25?
The Union Budget 2024-25 contains a total expenditure of ₹47,65,768 crore.
Which tax regime is better for an annual salary of Rs 25 lakhs?
For an annual salary of Rs 25 lakhs, the new tax regime is better for higher disposable income.
What is for railway in Budget 2024?
The budget allocation for the financial year 2024-25 to the Union Ministry of Railways stands at ₹2.55 lakh crore, indicating a 5.8% increase compared to the previous year's allocation of ₹2.41 lakh crore. Budget 2024 allocates funds for the modernization and development of railways, emphasizing improvements in infrastructure, safety measures, and technological advancements.
Is there any specific allocation for education in Budget 2024?
The total allocation for the Higher Education Department is ₹47,619.77 crore.
Are there provisions for environmental initiatives in Budget 2024?
The Interim Budget for 2024-25 allocated ₹600 crore for the National Green Hydrogen Mission.
