With eyes fixed on the upcoming general election, barely three months away, India’s Modi government presented the interim budget for 2024-25.
Finance Minister Nirmala Sitharaman, in a crisp less-than-an-hour-long speech in the parliament, outlined India’s income and expenditure during 2023-24 and announced short-term financial plan for the next few months until the new government takes charge.
‘Sabka Sath, Sabka Vikas, Sabka Vishwas’
“The Indian economy has witnessed profound transformation in the last 10 years,” said Sitharaman as she began her budget speech, outlining the Modi government’s initiatives for “comprehensive development of all people and all regions”.
Setting the tone for the upcoming election, she expressed confidence that Modi’s Bhartiya Janta Party (BJP) will be “blessed again by the people for a resounding mandate”.
Sitharaman also highlighted the ideology of ‘Sabka Sath, Sabka Vikas, Sabka Vishwas’ (everyone’s support, development and trust) as the ruling party’s guiding principle in “building a strong foundation for a developed India by 2047”.
She said that “inclusivity” was a major governance model for the Modi government highlighting GYAN (Gareeb, yuva, annadata, naari) or the poor, youth, farmers and the women as the biggest priority in the coming years.
Here are the big numbers of India’s budget performance as laid out by the finance minister:
25 crore people in 10 years lifted out of multi-dimensional poverty
50% increase in average real income of people
Rs 34 lakh crore directly transferred to people’s Jan Dhan accounts
78 lakh street vendors received credit assistance
12 crore farmers every year receive PM Kisan funds
4 crore farmers received crop insurance under PM Fasal Bima plan
1.4 crore youth trained under Skill India mission
390 universities and 7 IITs (Indian Institute of Technology) set up
28% more women enrol in education in last 10 years
43 crore loans sanctioned under PM Mudra (Micro Units Development & Refinance Agency) plan
30 crore Mudra loans sanctioned to women entrepreneurs
What are the biggest announcements?
According to the budget speech, the next five years are slated for big growth for India.
She announced this as a strategy for India’s golden era or “Amrit Kaal”.
She said that the government will adopt “economic policies for inclusive growth” and that the main guiding principle for next-generation reforms will be “reform, perform, transform”.
Notably, she singled out the MSME or the Micro, Small and Medium Enterprises sector saying it will be “an important policy priority for our Government to ensure timely and adequate finances, relevant technologies and appropriate training for the (MSME) to grow and also compete globally.”
Stressing geographical inclusivity, Sitharaman also noted that the aspirational districts programme will focus on district-level development, as well as a high priority for the next five years will be the development of the eastern India.
“Our Government will pay utmost attention to make the eastern region and its people a powerful driver of India’s growth,” she said to resounding claps in the parliament.
Here are other highlights of the budget speech:
Rural housing: The target for 3 crore houses is to be achieved shortly, and an additional 2 crore houses will be targeted in the next five years.
Rooftop solarisation: 1 crore houses will be enabled to obtain up to 300 units of free electricity every month.
Medical colleges: Plans to set up more medical colleges by utilising the existing hospital infrastructure
Ayushman Bharat: Healthcare cover to be extended to all ground-level ASHA and Anganwadi workers
Agriculture: 38 lakh farmers have already benefitted from various schemes, generating 10 lakh employment. Private and public investment in post-harvest activities will be promoted along with modern storage supply chains.
Dairy development: India is the world’s largest milk producer but with low productivity of milch-animals. A new programme will be formulated to focus on dairy farmers.
Fisheries development: New department for fisheries has resulted in doubled production. Seafood exports have doubled too since 2013-14. New plans will be stepped up to enhance aquaculture production up to 5 tonnes per hectare. Exports will be doubled to Rs 1 lakh crore generating 55 lakh employment opportunities.
Lakhpati didi (rich sister): 83 lakh Self Help Groups (SHGs) with 9 crore women are transforming rural socio-economic landscape. 1 crore women have already become rich (earning in lakhs). They will be honoured and the target for next five years will be enhanced to 3 crore.
Technology: New age tech and data will be a top focus. Under the guiding principle of “Jai Jawan Jai Kisan Jai Vigyan Jai Anusandhan”, Rs 1 lakh crore corpus will be formed for 50-year interest free loan especially to the tech-savvy youth. There will also be a new scheme for deep tech for defence purposes.
Infrastructure development: The outlay for 2025 is being increased by 11.1% to Rs 11.1 lakh crore – around 3.4% of GDP.
Railways: Three major economic railway corridor programs will be implemented focusing on road, rail, freight, and port corridors. Also, nearly 40,000 normal rail bogies will be converted to Vande Bharat standards
Aviation: In the last 10 years, number of airports in the country has doubled to 149. 517 new routes are carrying 1.3 crore passengers domestically. Expansion of existing and new airports will continue. There will also be expansion of metro rail and E-buses in tier-2 and 3 cities.
Green energy: Several measures will be taken to meet India’s net zero commitment by 2070. These include – viability gap funding for harnessing offshore wind energy potential for initial capacity of one giga-watt; coal gasification and liquefaction capacity of 100 metric tonnes by 2030; and expansion of electric vehicle ecosystem, among other initiatives.
Blue economy: Will focus on coastal aquaculture and mariculture schemes
Tourism: The budget highlighted spiritual tourism as having tremendous opportunity for growth in domestic tourism and for local entrepreneurship. Additionally, several projects for port connectivity and infrastructure will be taken up on islands including the Lakshadweep.
Foreign Direct Investment: – The FDI inflow during 2014-23 was $596 billion – twice the inflow during 2005-14 period. The budget speech highlighted FDI as “First developed India” and announced new bilateral investment treaties as being explored.
Domestic reforms: Rs 75,000 crore is being proposed for state-level reforms
Sitharaman also stressed on societal changes as part of her budget speech, saying new committee will be formed to make recommendations for challenges posed by a fast population growth.
She also announced that the budget estimate for 2024-25 will include the total receipts (other than borrowings) and the total expenditure estimated at Rs 30.80 and Rs 47.66 lakh crore respectively. The tax receipts are estimated at Rs 26.02 lakh crore.
Importantly, she added that the fiscal deficit in 2024-25 will be a reduced estimate at around 5.1% of GDP and in 2025-25 will be further down at 4.5%.
It is overall a balanced budget, say many experts, adding that the roadmap seems well laid out.
“It is a responsible interim budget,” said well-known economist Shamika Ravi, also member of the Economic Advisory Council to the Prime Minister. “No big populist announcements aimed at the election. It builds on the hard-fought achievements of the last 10 years. Kudos FM!”
However, former finance secretary Subhash Chandra Garg held a counter-view. “There was a strong focus on populist policies,” Garg told India Today, noting that even the “capital expenditure is not increased massively. It is only 11%.”
Again, countering that, Praveen Khandelwal, secretary general of the Confederation of All India Traders (CAIT) told PressXpress, said that he rather expected the 11.1% increase in capex will benefit traders. “It is a progressive (plan).”
“To me, the biggest takeaway was GYAN. I am expecting much more action on that in the full-fledged July budget. Another big one is the extension of Ayushman Bharat to ASHA and Anganwadi workers,” said Rajeev Kumar, former vice chairperson of Indian government think tank Niti Aayog. “I also like the SHG announcement – 93 lakh women workers creating 1 crore women lakhpatis and now the target is raised!”
In terms of climate-related announcements, the budget showed a “fiscal rectitude to foster clean energy-led development” but it is a “wait and watch for now”, according to Abinash Mohanty, Sector Head Climate Change and Sustainability at the IPE Global international development organization and an expert reviewer of the IPCC’s sixth assessment report.
Speaking to PressXpress, Mohanty said, “The announcement of coming up with a scheme on climate resilient adaptation activities along the Indian coastline will create more Atmanirbhar green jobs by strengthening the blue economy 2.0, which will supplement the climate startup ecosystem.”
“Through a walk-the-talk green growth and green transition, the budget was razor-sharp in providing impetus to sunshine sectors that can mainstream carbon neutrality and foster locally-led adaptation actions. The budget spells clear intent but straight mandates and fiscal consolidation to shield lives, livelihoods and infrastructures from climate risks is a wait and watch for now.”
Overall, it is a budget that seems to have “something for everyone”, according to economists and experts. But the real policies and allocations that will be announced after the election will decide whether it is a make-or-break budget for India’s aspirational future, they point out.
Tulika Bhatnagar is a former BBC News senior journalist who has extensively covered the Asia-Pacific region’s geopolitics and current affairs for over 20 years. She is currently based in New Delhi as the International Correspondent for Press Xpress. You can reach out to her at tulika.bhatnagar@pressxpress.org - Twitter @Tulika_B
