Finance Minister Nirmala Sitharaman presented the Budget 2024 on Thursday. She pegged the fiscal deficit target for 2024-25 at 5.1% of Gross Domestic Product.
In 2023-24, the government initially set the fiscal deficit target at 5.9 percent of GDP but later revised it downward to 5.8 percent, representing the variance between total revenue and expenditure. The fiscal deficit is indicative of potential government borrowings. The government aims to bring the fiscal deficit below 4.5 percent of GDP by the fiscal year 2025-26.
There were no alterations or increases in the tax burden on citizens, adhering to the convention of maintaining existing tax rates for both direct and indirect taxes, including import duties. However, certain expiring tax benefits for start-ups and investments made by sovereign wealth or pension funds, along with tax exemptions for specific income of certain International Financial Services Centre (IFSC) units, were extended until 31.03.2025.
The government proposed an 11.1 percent increase in the capital expenditure outlay to Rs 11.11 lakh crore in 2024-25, focusing on setting up long-term physical or fixed assets. This follows a 33 percent increase in the capital expenditure outlay to Rs 10 lakh crore in 2023-24, constituting 3.3 percent of the GDP, in the last full Budget under the Prime Minister Narendra Modi-led government’s second term.
The significant boost in capital expenditure plays a crucial role in enhancing growth potential, job creation, attracting private investments, and providing resilience against global challenges.
The interim budget, presented today, caters to financial requirements until a new government is formed after the Lok Sabha polls. The new government is expected to present a full budget in July. With this budget presentation, Finance Minister Sitharaman matches the record set by former Prime Minister Morarji Desai, who, as finance minister, presented five annual budgets and one interim budget between 1959 and 1964.
The Budget Session of Parliament commenced with President Droupadi Murmu addressing a joint sitting of Lok Sabha and Rajya Sabha. The President highlighted the historic achievements of the country in 2023, maintaining momentum as the fastest-growing major economy.
The Ministry of Finance anticipates India’s economy to grow close to 7 percent in the fiscal year 2024-25, beginning in April. The Indian economy expanded by 7.2 percent in 2022-23 and 8.7 percent in 2021-22, with expectations of growing by 7.3 percent in the current fiscal year 2023-24, retaining its status as the fastest-growing major economy.