India Budget A budget is a financial plan prepared by an organization, government, or individual to control income and expenditure over a period of time. In this, the sources of income and expenditure are analyzed and money is distributed among different sectors so that a stable and sluggish economic situation can be maintained. The budget contains socially, economically, and politically important decisions that are taken to support the development and prosperity of a certain region. The budget is part of the system that is used to help establish a prosperity and strategic justice.
India Budget date
- The Budget of India will be presented on 1 February 2024 to set out the economic plan for the year 2024–25. Budget is an important economic document which is prepared to ascertain the country’s economic status, direction of development, and policies in social sectors.
- In the budget, an attempt is made to balance income and expenditure to strengthen the economic vision of the country. In this, decisions are taken to provide economic support to various sectors, such as education, health, agriculture, entrepreneurship, and others. The main objective of the budget is to make the country safe, prosperous, and improve the economic condition with social justice.
- After presenting the budget, efforts are made by the government to implement the decisions so that the economic activities of the country can be improved and the citizens can get a better life.
When did the budget start in India?
Budgeting in India began on 7 April 1860, when the first budget was presented. Since then, every year the government has held a special session, which we call ‘Budget Session’, to present its financial plans and policies.
The main objective related to the budget is to prepare the economic plans of the country and to take steps towards prosperity by keeping the income and expenditure balanced. In this, funds are distributed to various sectors, such as education, health, agriculture, entrepreneurship, and other prosperity areas.
After the budget session, steps are taken by the government to implement the decisions, so that the economic activities of the country can be improved and the citizens can get a better life. It is an important part of the budget which also helps the country in establishing strategic justice.
what comes in the budget?
Budget is a detailed economic document which includes many important elements. This paper is a strategy to control and improve the economic system of the country. Following are some of the main topics that may be included in the budget:
- Income: The budget gives details of the income coming to the government during the financial year. It includes all the sources supporting it, such as taxes, profits, and income generated.
- Expenditure: Involves the distribution of money, called expenditure, among different sectors of the government. It is allocated to education, health, agriculture, defence, and other sectors.
- Loans: The budget gives details of any type of loans as per the requirement of the government, which are obtained from various sources.
- Allocations: The budget contains details of funds earmarked for different sectors which are allocated for their development and prosperity.
- Economic Perspective: The budget contains details of the government’s strategy, goals, and proposed steps for the economic system.
- Fiscal Discipline: Budget is also important from the point of view of economic discipline in which details of how the financial management of the government is being done are given.
Why is the budget taken?
The main purpose of taking the budget is to control the economic management and plans of the country. It is a financial plan that helps the government prepare a predetermined plan to balance income and expenditure over a specific period of time.
Through the budget the government decides how to distribute money among different sectors so that prosperity and development can occur. Through this, decisions are taken in education, health, agriculture, entrepreneurship, and other areas which help in improving the strategic and economic condition of the country.
The funds and loans earmarked through the budget also ensure that the government can provide the necessary funds from various sources to carry out its economic plans.
Overall, the budget ensures that the economic management of the country is structured, and that people get a chance for a better life with strategic security and social prosperity.
In which country was the budget held first?
The budget system was first introduced during the British rule. It started in India in 1860 when the first budget was presented. At this time, there was a need to reform finances and the budget was presented as an economic plan whereby the government could improve economic management in various sectors.
Subsequently, even after independence, India has continued the budget system whereby the government can ensure the economic condition of the country by regularly distributing funds among various sectors. In the decision-making process through budget, the government takes important decisions for the development of the country, such as in education, health, agriculture, and other sectors.
Union Budget : Nirmala Sitharaman’s Budget Speech
- FY24 fiscal deficit seen at 5.8% of GDP
- FY24 total expenditure revised to ₹ 44.90 lakh crore
- FY 24 total receipts other than borrowings is ₹ 27.56 lakh crore
- FY24 tax receipts are ₹ 23.24 lakh crore
- FY25 fiscal deficit seen at 5.1%
- Aim to reduce fiscal deficit to below 4.5% by FY26
- FY25 gross market borrowing seen at ₹ 14.13 lakh crore
Nirmala Sitharaman announcement
Nirmala Sitharaman, India’s Finance Minister, on Thursday made important announcements regarding the financial health of the country. He said that the country’s fiscal deficit for the financial year 2025 will reduce from 5.8% in 2024 to 5.1%, which is a sign of improving economic health of the country.
- He smoothened several important steps for the development of the country during this time and expressed hope of increasing capital expenditure and tax revenue in FY 2025. also announced orders for high-end aircraft for the Indian Air Force and plans to develop new airports.
- Sitharaman also talked about several measures to boost tourism, such as long-term interest-free loans to states and a plan to rapidly develop new airports.
- He spoke of “unprecedented” growth in India’s economy with a more highly leveraged currency and emphasized four key areas of government: poverty, youth, women and farmers.
- Along with this, he blessed to empower the country through investment and stimulation to promote economic health. Her statement makes it clear that Sitharaman is fully capable of strengthening India’s financial structure and reviving the sluggish economy.
What is “Interim Budget?
The interim budget plays an important role during an election year when the sitting government is unable to present a comprehensive budget. This temporary fiscal plan acts as a bridge, covering short-term expenses and revenues of the government until a new government is formed after the elections.
What aspects are included in the interim budget?
India budget – The interim budget goes beyond a mere snapshot of financial data; It includes detailed estimates of various elements such as government expenditure, revenue estimates, fiscal deficit and overall financial performance. This interim measure is designed to provide a concise but comprehensive overview, guiding the fiscal trajectory for a limited period until the full Budget is presented.
How is the Union Budget different from the Interim Budget?
In contrast, India budget the Union Budget is a more comprehensive and detailed financial statement presented annually. It presents a comprehensive analysis of the estimated expenses and costs of the government for the entire financial year. Unlike the interim budget, which serves a temporary purpose during the election cycle, the Union Budget provides a roadmap for the broad financial strategy and policies that the government aims to implement throughout the financial year.
Today India budget History
- Nirmala Seetharaman’s Briefest Speech: Finance Minister Nirmala Seetharaman presented her sixth consecutive budget, delivering her shortest-ever speech lasting only 56 minutes.
- MGNREGS Allocation Boost: The 2024 Budget allocated ₹86,000 crores for the rural employment scheme MGNREGS, reflecting a 43.33% increase from the previous allocation. However, the total expenditure for the program, according to the Union Rural Development Ministry, already stands at ₹88,309 crores.
- Interim vs. Annual Budget Explained: In an election year, the incumbent government presents an Interim Budget, covering short-term expenses until a new government is formed. This budget, presented by Finance Minister Nirmala Sitharaman, differs from the Annual Budget, which outlines comprehensive financial plans for the entire fiscal year.
- Green Initiatives in Interim Budget: Alongside financial and infrastructure measures, Sitharaman announced green initiatives to meet India’s net-zero commitments by 2070. These measures align with sustainable and eco-friendly practices.
- Market and Industry Reactions: Initial market reactions to the Interim Budget were mixed. While shares of electric vehicle-related companies surged, overall market sentiment remained cautious. Live updates on market and industry reactions were provided.
- PM Modi’s Remarks: Prime Minister Narendra Modi congratulated the people on the historic budget, emphasizing key announcements benefiting farmers, the poor, and the middle class. The budget focuses on infrastructure, providing free electricity through rooftop solarization, and supporting income generation.
- Transformative Budget Empowering India’s Future: PM Modi highlighted the budget’s transformative nature, empowering the youth, poor, women, and farmers. Key decisions include a ₹1 lakh crore corpus fund for research and innovation, tax exemptions for startups, and a historic ₹11.11 lakh crore allocation for capital expenditure.
- New Schemes and Focus Areas:
- A new scheme for deep tech in the defense sector.
- Focus on vaccination against cervical cancer for girls aged 9 to 14.
- Recognition of the complex global affairs and successful navigation by strengthening the financial sector.
- Tax Proposals and Exemptions:
- No changes proposed in tax rates, maintaining continuity.
- Extension of tax exemptions for startups and IFSC units until March 31, 2025.
- Budget Estimates 2024-25:
- Total receipts (excluding borrowings): ₹30.80 lakh crores
- Total expenditure: ₹47.66 lakh crores
- Tax receipts: ₹26.02 lakh crores
- 50-year interest-free loans for capital expenditure to states: ₹1.3 lakh crores
- Estimated fiscal deficit: 5.1% of GDP
- Economic Growth Achievements: India budget Sitharaman highlighted the success in overcoming economic challenges since 2014, putting the economy on a path of high sustained growth. The focus on good governance and ‘Nation First’ has led to significant economic improvements.
- Tax Reforms and Simplification: Efforts to improve taxpayer services include withdrawing outstanding direct tax demands up to ₹25,000 for years up to 2009-10 and ₹10,000 for the period from 2010 to 2015, benefiting around 1 crore taxpayers.
- Railway Corridor Programs: Three major railway corridor programs were introduced, targeting energy, mineral and cement corridors, port-connectivity corridors, and high-traffic density corridors. The conversion of 40,000 normal rail bogeys to Vande Bharat standards was emphasized.
- Strategic Initiatives for Amrit Kaal India budget:
- Aatma Nirbhar Oilseeds Abhiyan.
- Comprehensive program for dairy development.
- Stepped-up implementation of PM Matsya Sampada Yojana.
- Expansion of technological innovations through a ₹1 lakh crore corpus fund for research and innovation.
- Vision for Viksit Bharat (Developed India): Sitharaman presented a vision for a prosperous India in harmony with nature, focusing on modern infrastructure and opportunities for all citizens. The next five years are anticipated to be a period of unprecedented development.
- Government’s Societal and Economic Focus: The government is committed to creating an economy with high growth, fostering an environment for people to meet their aspirations. Societal changes, reforms in states, and a focus on domestic tourism were highlighted.
- Next-Generation Reforms: Sitharaman emphasized that the government will take next-generation reforms, focusing on economic policies that sustain growth, improve productivity, create opportunities, and enable people to enhance their capabilities.
- Challenges Overcome and Positive Transformation: Sitharaman acknowledged the government’s exemplary track record in overcoming challenges over the last 10 years, resulting in positive transformations in various sectors. The focus has been on empowering people and achieving socio-economic transformation.
- Garib Kalyan, Desh ka Kalyan: The Finance Minister reiterated the government’s commitment to empowering the poor and marginalized sections of society. The Sabka Saath approach has led to the upliftment of 25 crore people from multi-dimensional poverty.
- Outcome-Based Governance Model: Sitharaman highlighted the government’s focus on outcomes rather than outlays, ensuring socio-economic transformation. Transparent and accountable administration has been provided, with benefits reaching all sections of society.
- Expectations for Resounding Mandate: The Finance Minister expressed expectations that the government, based on its remarkable work, will be blessed with a resounding mandate.
- Historical Changes in Budget Presentation: The Finance Minister presented historical changes in budget presentation, moving away from the traditional briefcase and adopting a ‘bahi-khata’ in 2019. In 2021, the budget became paperless.
- Past Finance Ministers’ Interim Budgets: India budget Past Finance Ministers have used the Interim Budget to announce significant measures. For instance, Piyush Goyal announced schemes like PM KISAN Samman Nidhi in 2019. Previous ministers have also utilized the occasion to announce sops and doles.
- Key Numbers to Watch:
- Fiscal Deficit for 2024-25: Estimated at 5.1% of GDP.
- Disinvestment/Privatization Target: Expected to be set at a realistic sub-Rs 50,000 crore.
- Capital Expenditure: Government’s planned capital expenditure for the current fiscal is ₹10 lakh crore.
India budget Banking Sector:
In recent years, the Indian banking sector has shown signs of recovery and improved health. This positive trajectory can be attributed to the implementation of more stringent norms by the regulatory authority, the Reserve Bank of India (RBI). These measures have successfully contributed to the decline in Non-Performing Assets (NPAs), helping banks to shed the burden of bad loans from their balance sheets. The banking industry’s improved fundamentals suggest a more resilient and stable financial system.
Indian Economy: India budget
As India approaches Budget 2023-24, the global economic environment presents challenges. Volatile commodity prices, coupled with a tough global scenario, create uncertainties. Economists identify both bright spots and concerning metrics in the Indian economy. Bright spots include specific sectors exhibiting strength, while concerns arise from factors like export challenges and inconsistent trends in Core Sector or Index of Industrial Production (IIP) figures in recent months. Managing inflation risks, especially with volatile commodity prices, is a key consideration.
Private Sector Investment Levels:
Private sector investment in India has faced challenges, with a prolonged period of anaemic capital expenditure. The situation has been further complicated by the impact of the COVID-19 pandemic and the geopolitical tensions, notably the war in Ukraine. Ambiguity in the economic and geopolitical landscape has been a significant deterrent to private sector investments. Businesses, averse to uncertainty, have struggled to make substantial capital expenditures. Over the past three years, ambiguity has been a dominant factor influencing both personal and professional spheres.
India budget– While the banking sector has demonstrated resilience and a return to stability, the broader economic landscape faces a mix of opportunities and challenges. Navigating through a tough global environment and managing inflation risks will be critical. Private sector investment, a key driver of economic growth, needs a conducive environment with reduced ambiguity to regain momentum. As India anticipates the Budget for the upcoming fiscal year, stakeholders are keenly observing how the government addresses these aspects to foster sustainable economic development.