Nirmala Sitharaman Reveals Interim Budget: Key Takeaways 

Nirmala Sitharaman, finance minister, Government of India presented the interim budget in the Parliament. It marks her sixth budget presentation and serves as the final budget for the second term of the Narendra Modi-led government. The full budget will be presented in June once the Lok Sabha elections are held because during an election year, the current government is unable to present a comprehensive budget due to the possibility of a change in leadership following the polls. 

Therefore, an interim budget is necessary.  Budget 2024-25 had a comprehensive approach towards all the sectors and focused on overall growth. FM started her speech by talking about the transformation witnessed by the Indian economy in the last decade. She claimed that the government has overcome all the challenges faced by the nation before 2014 under the leadership of Prime Minister Narendra Modi and the economy is witnessing positive trends amidst global recession.     

Budget 2024-25 - Key takeaways 

Taxation: FM announced that there will be no alterations to the tax structure, including both direct and indirect taxes. However,Sovereign wealth funds and pension funds will continue to enjoy tax-free status for an additional year. The estimated total revenue receipts for FY25 have been revised to Rs 30 lakh crore, exceeding the revised estimate of Rs 26.99 lakh crore in FY24.  

Technology and telecom industry: A 1 lakh crore corpus, with a 50-year interest-free loan, is set to be established for tech-savvy youth. Corpus will provide long term financing or refinancing with long tenures with low or nil interest rates. “It's expected that this will encourage the private sector to scale up research and innovation significantly in sunrise domains.”-said FM.  The government targets to generate ₹1.2 trillion in revenue from the telecom sector for FY25. This goal represents a roughly 30% increase from the revised revenue target of ₹935.4 billion set for the sector in FY24.  Government has also raised the allocation for capital expenditure by 11.1% to Rs 11.11 lakh crore, equivalent to 3.4% of GDP. This move aims to stimulate economic activity and aligns with the long-term vision of a developed India (Viksit Bharat). No change in the taxation regime will also benefit the industry in cost cutting and efficient production. 

Fiscal deficit: Nirmala Sitharaman adhered to fiscal responsibility by maintaining a fiscal deficit of 5.8 percent (of GDP) for FY24, which is lower than expected. The estimate for the following year stands at approximately 5.1 percent, again below initial forecasts.

Infrastructure: In the address during the Interim Budget 2024 speech in Parliament, it was declared that there will be an increase in the infrastructure outlay for FY25 to Rs 11.11 lakh crore. Sitharaman stated, "Capital spending for 2024-25 has been elevated by 11 percent to reach Rs 11.11 lakh crore, constituting 3.4 percent of GDP." 

Tourism: The highlights for the tourism industry include a focus on airport development, offering long-term interest-free loans for states to enhance iconic tourist centers, and initiating projects to improve tourism infrastructure on the nation's islands. It is expected by the government that these measures aim to boost the tourism and hospitality sector, with optimism for their successful implementation in the upcoming budget.

Railways: The government has announced the initiation of three key economic railway corridor programs as part of the PM Gati Shakti initiative. These programs encompass energy, mineral, and cement corridors, port connectivity corridors, and high-traffic density corridors. Aimed at improving logistics efficiency and reducing costs, these initiatives are expected to decongest high-traffic corridors, leading to enhanced operations, safety, and higher travel speeds for passenger trains.  Furthermore, the conversion of forty thousand regular rail bogies to Vande Bharat standards is anticipated to elevate passenger safety, convenience, and comfort. In the Union Budget 2023-24, the ministry allocated a record capital outlay of Rs 2.40 lakh crore for Indian Railways, marking a significant increase compared to the outlay in the Financial Year 2013-14. 

Women empowerment: This interim budget highlighted the remarkable progress in women's empowerment over the past decade. She noted a 28% increase in female enrolment in higher education and emphasized the momentum in entrepreneurship for women, citing the issuance of 30 crore Mudra Yojana loans. Sitharaman also mentioned legislative measures and housing allocations aimed at enhancing women's dignity, contributing to their increased participation in the workforce.

The article has been written by Rashi Grover