In a decisive move, Finance Minister Nirmala Sitharaman presented the sixth budget of her tenure, unlocking a comprehensive fiscal roadmap for the nation. The announcements reverberated across sectors, touching railways, tourism, healthcare, technology, aviation, green energy, aquaculture, housing, and beyond. While maintaining the status quo on direct and indirect taxes and import duties, the budget demonstrated a keen focus on spurring economic growth through strategic investments and targeted allocations.
• One of the standout features of the budget was the extension of tax exemptions for start-ups and investments made by sovereign wealth or pension funds until March 31, 2025. This move not only encourages entrepreneurial ventures but also signals a commitment to fostering long-term investments, injecting vitality into the economic ecosystem.
• The financial contours revealed in the budget charts provide a glimpse into the government’s fiscal strategy. The Revised Estimate of total receipts, excluding borrowings, stood at a formidable Rs 27.56 lakh crore, reflecting a robust growth momentum and formalization in the economy. On the expenditure front, the capital expenditure outlay for FY25 was raised to an impressive Rs 11 lakh crore, underscoring the government’s commitment to investing in durable assets like infrastructure.
• The fiscal deficit target of 5.1% for FY 25, down from the revised estimates of 5.8% in the previous fiscal year, signals a disciplined approach to managing the difference between government revenues and expenditure. The government’s ambition to achieve a fiscal deficit of 4.5% by 2025-26 aligns with the broader goal of ensuring financial sustainability.
• Examining the sources of budgetary inflow, borrowings and other liabilities emerged as the primary avenue, followed by income tax and GST. This highlights the government’s reliance on a diversified set of sources to fund its initiatives, ensuring a balanced approach to fiscal management.
• On the expenditure side, a significant portion is allocated to paying interest and disbursing funds to states in the form of taxes and duties. While interest payments are a necessary obligation, the allocation to states emphasizes the government’s commitment to decentralized development, empowering regions to drive their own growth.
• Delving into the sectoral allocations, the Defence Ministry took the lion’s share with a massive allocation of 6.21 lakh crore, reaffirming the government’s commitment to national security. Road Transport & Highways and Railways followed suit, underlining the importance of robust infrastructure in propelling economic development.
• The major schemes outlined in the budget underscored the government’s dedication to core welfare initiatives that drive socio-economic progress. These allocations reflect a pragmatic approach, prioritizing initiatives that directly impact the well-being of citizens.
• In the realm of railways, the announcement of three major economic corridors underscores a strategic vision. These corridors, coupled with dedicated freight corridors, are poised to accelerate GDP growth and reduce logistic costs, aligning with the government’s broader economic objectives.
• However, the budget leaves room for scrutiny in health expenditure. While the allocation for the Department of Health & Family Welfare for FY25 exceeds the revised estimates of the current fiscal year, the allocation to the Union Ministry of Health remains below the 2% mark of total expenditure. This raises questions about the government’s commitment to bolstering the healthcare sector, especially in the backdrop of global health challenges.
In conclusion, Nirmala Sitharaman’s budget for 2024-25 is a nuanced tapestry of fiscal measures, weaving together investments, allocations, and strategic priorities. While commendable in various aspects, it prompts a closer examination of health sector allocations and underscores the imperative for sustained economic growth and welfare-driven initiatives. The fiscal blueprint sets the stage for a dynamic year ahead, where economic resilience and social well-being must walk hand in hand.
(The article is solely the opinion of the author. The views expressed here are solely personal and not in any way connected to any organisation or any political party).
