In a crucial parliamentary session today, Finance and Corporate Affairs Minister Nirmala Sitharaman presented the Interim Union Budget for the fiscal year 2024-2025, focusing on a substantial increase in capital expenditure and sustaining robust economic growth.
Capital Expenditure Soars:
Minister Sitharaman announced a noteworthy 11.1 per cent hike in the capital expenditure outlay for the upcoming year, amounting to an impressive Rs 11,11,111 crore, equivalent to 3.4 per cent of the GDP. This strategic move comes on the heels of a four-year effort that witnessed a threefold increase in capital expenditure, generating significant multiplier effects on economic growth and employment creation.
Economic Growth Projections:
The Minister, while presenting the First Advance Estimates of National Income for FY 2023-24, revealed that India's Real GDP is anticipated to grow at an impressive 7.3 per cent. This aligns with the RBI's revised growth projections for the fiscal year, reflecting a resilient Indian economy amidst global challenges. The IMF's upward revision of India's growth projection further underlines international confidence in the nation's economic strength.
Strong Revenue Collections:
Minister Sitharaman highlighted the buoyancy in revenue collections, citing the seventh instance where gross GST revenues surpassed ₹1.6 lakh crore, reaching ₹1.65 lakh crore in December 2023. She projected total receipts, excluding borrowings, and total expenditure for 2024-25 at ₹30.80 lakh crore and ₹47.66 lakh crore, respectively, with tax receipts estimated at ₹26.02 lakh crore.
Key Fiscal Initiatives:
The Finance Minister declared the continuation of the fifty-year interest-free loan scheme for capital expenditure to states, with an outlay of ₹1.3 lakh crore. Additionally, a ₹75,000 crore interest-free loan was proposed to support Viksit Bharat's milestone-linked reforms by state governments.
Fiscal Deficit and Borrowings:
Addressing fiscal consolidation, Minister Sitharaman projected a fiscal deficit of 5.1 per cent of GDP in 2024-25, adhering to the previously outlined path. Gross and net market borrowings through dated securities for the fiscal year are estimated at ₹14.13 lakh crore and ₹11.75 lakh crore, respectively, both lower than the figures for 2023-24.
Bright Spots in the Economy:
The Minister pointed out the positive aspects of the economy, citing Revised Estimates of total receipts at ₹27.56 lakh crore, with tax receipts at ₹23.24 lakh crore, and total expenditure at ₹44.90 lakh crore. Strong growth momentum and formalization in the economy were credited for the higher-than-expected revenue receipts.
The Budget presented is an interim one, given the imminent expiration of the Bharatiya Janata Party-led Central government's tenure. A full Union Budget is expected in July after the formation of the new government.