Introduction:
The anticipation surrounding India's economic trajectory came to a halt as Finance Minister Nirmala Sitharaman presented the Interim Budget 2024-25 at Parliament on February 1, marking the commencement of the Budget Session. This crucial fiscal roadmap outlined several key initiatives and targets for the upcoming financial year. Let's delve into the highlights that shape the economic landscape for India in the year ahead.
1. Fiscal Prudence and Borrowing:
In a notable move towards financial responsibility, the Finance Minister revealed that the fiscal year 2024-25's gross borrowing is estimated at ₹14.13 trillion. Importantly, this represents a reduction from the borrowing levels of the previous fiscal year, indicating a commitment to fiscal consolidation.
2. Research-Driven Self-Sufficiency in Cooking Oil:
Highlighting the significance of research, the Budget emphasized the growth and development of indigenous oilseeds like mustard, groundnut, and sesame. The objective is clear – to make India self-sufficient in cooking oil, as the country currently imports about 60% of its cooking oil, incurring an expenditure of over ₹1.5 trillion annually.
3. Aggressive Fiscal Consolidation Targets:
The Finance Minister adopted an aggressive fiscal consolidation stance, announcing an FY25 fiscal deficit target of 5.1%, surpassing expectations set at 5.3%. This follows the successful achievement of the FY24 fiscal deficit target of 5.8%, beating the target of 5.9%, thanks to enhanced revenue mobilization.
4. Affordable Housing for the Middle Class:
Addressing the housing needs of the middle class, the Budget introduced a scheme allowing those living in rented houses, slums, and unauthorized colonies to purchase or construct their own homes. This move aligns with the government's commitment to inclusive development.
5. Strengthening Healthcare Infrastructure:
The healthcare sector received attention with announcements to set up more medical colleges using existing infrastructure. Additionally, the Ayushman Bharat scheme will now extend its healthcare cover to all Anganwadi workers and helpers, enhancing the welfare net for those in the grassroots.
6. Empowering Farmers and Promoting Private Investment:
Efforts to boost farmers' income will be intensified, with a specific focus on promoting private investment in post-harvest activities. This signals a commitment to comprehensive agricultural development and addressing the needs of those at the forefront of India's economy.
7. Taxation Reforms:
In a significant move, the Finance Minister announced the withdrawal of outstanding disputed tax demands, providing relief to approximately 1 crore taxpayers. However, the disappointment came as tax rates remained unchanged in the interim Budget 2024, including import duties. Yet, there is a silver lining, with extensions granted to certain benefits for startups and tax exemptions for specific International Financial Services Centre (IFSC) units until March 2025.
Conclusion:
As India charts its economic course for the fiscal year 2024-25, the interim Budget reflects a nuanced approach towards fiscal prudence, inclusive growth, and sector-specific reforms. The outlined initiatives not only address immediate concerns but also lay the foundation for a resilient and self-sufficient economy. The upcoming year promises to be a dynamic one, driven by the government's commitment to navigate challenges and propel India towards sustainable development.
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