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What Is New In The Interim Union Budget 2024-25 Ahead Of General Elections?

As the General elections to elect the members of 18th Lok Sabha is scheduled to take place from April 19 to June 1, with the ruling alliance of NDA all set to go up against the newly formed I.N.D.I.A alliance. The Union Finance Minister Nirmala Sitharaman presented her sixth Budget on February 1 ahead of general election. The finance minister presented the Interim Budget in a joint sitting of the Rajya Sabha and Lok Sabha. The comprehensive budget will be presented after the new government is formed following the general election.

Before this, acting Finance Minister Piyush Goyal delivered the interim budget ahead of the 2019 general elections. There have been fourteen interim budgets issued as of now. During an election year, it is common legislative procedure for the government to create an interim budget for the remainder of its time and leave the work of framing the full budget to the incoming dispensation. The Parliament adopts a vote of account through the Interim Budget, granting the government temporary permission to meet administrative expenses until the next government is constituted. The vote of account is usually valid for two months, although it can be extended.

What is the Interim Budget?

In an election year, the present government is unable to publish a full Union Budget; thus, the finance minister proposes an interim budget that covers the government's expenses and revenues until a new administration is elected. Thus, according to parliamentary custom, the outgoing government delegated the duty of drafting the complete Budget to the incoming dispensation following the Lok Sabha elections.

The interim budget normally comprises estimates of expenditure, revenue, fiscal deficit, financial performance, and expectations for the incumbent government's next fiscal year. However, it cannot contain any substantial policy pronouncements. According to the Election Commission's code of conduct, no substantial schemes can be included in an interim budget because they may influence voters. The incumbent administration is not required to present the Economic Survey alongside the interim budget.

A Union Budget is effective until the end of the fiscal year on March 31, therefore the government's speeding rights are limited to that date. The current administration must obtain Parliament's authority to incur costs between March 1 and the formation of a new government. Thus, the interim Budget is revealed.

On What Things The Budget Focuses:

  1. That the capital expenditure outlay for the next year is being increased by 11.1 per cent to Rs 11,11,111 crore, which would be 3.4 per cent of the GDP.
  2. India's real GDP is expected to rise at 7.3 percent. This is also consistent with the RBI's increased revision of growth expectations for FY2023-24 (at its December 2023 Monetary Policy Committee meeting) from 6.5% to 7%, triggered by robust growth in Q2 FY2023-24.
  3. According to the International Monetary Fund IMF, India is on track to become the third-largest economy in 2027 (in USD at market exchange rate), and its contribution to global growth is expected to increase by 200 basis points over the next five years. Furthermore, numerous international agencies such as the World Bank, the IMF, the OECD, and the ADB expect India to grow by 6.4%, 6.3%, 6.1%, and 6.7%, respectively, in 2024-25.
  4. In 2024-25, total receipts other than borrowings and total expenditures are anticipated to be Rs 30.80 and 47.66 lakh crore, respectively. Tax collections are estimated to be Rs 26.02 lakh crore.
  5. The plan of fifty-year interest-free loans for capital expenditure to states would be extended this year, with a total investment of Rs1.3 lakh crore. This year, the State Governments propose a provision of 75,000 crore rupees as a fifty-year interest-free loan to support the milestone-linked reforms of Viksit Bharat.
  6. In 2024-25, the fiscal deficit is expected to be 5.1% of GDP if current trends continue.
  7. The gross and net market borrowings through dated securities in 2024-25 are anticipated to be Rs 14.13 and 11.75 lakh crore, respectively, and will be lower than in 2023-24.
  8. The Finance Minister highlighted some of the economy's bright areas, stating that the revised estimate of total receipts other than borrowings is Rs 27.56 lakh crore, with tax receipts at Rs 23.24 lakh crore. The revised estimate for overall expenditure is Rs 44.90 lakh crore. Revenue receipts of Rs 30.03 lakh crore are projected to be higher than the budget estimate, indicating strong economic growth and formalisation.
  9. Smt Nirmala Sithraman stated that Prime Minister Shri Narendra Modi strongly believes in and focuses on four important castes. They are called 'Garib' (poor), 'Mahilayen' (women), 'Yuva' (youth), and 'Annadata' (farmer). She stated that their needs, aspirations, and wellbeing are the government's top concern because the country grows when they do. As they are the main voters in the country.
  10. The Finance Minister emphasised that the government is pursuing an all-round, all-pervasive, and all-inclusive strategy to development. It applies to all castes and persons at all levels. She stated, "We are working to make India a 'Viksit Bharat' by 2047." To achieve that goal, we must enhance people's capabilities and empower them.

The interim budget is made according to the youngster and women voters as in the general election they will be have major vote share. According to the Election Commission of India (ECI), India had 90 crore eligible voters for the 2019 General Elections, with around 15 million of them voting for the first time. Notably, according to reports for the General Elections 2024, the official number of voters is expected to increase by 7 crore, bringing the total number of eligible voters from 90 crore to 97 crore in which most of them are youngsters and women voters.

Government will pay utmost attention to make the eastern region and its people a powerful driver of India's growth. Government will form a high-powered committee for an extensive consideration of the challenges arising from fast population growth and demographic changes. It will be quite challenging for the current government to grab the votes of the people as they have expected more from the interim budget from the government.


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