Newspulse

Introduction

As India anticipates the Interim Budget on February 1, 2024, ahead of the upcoming general election, questions arise about its focus, implications, and economic direction. This FAQ aims to provide insights into the key aspects of the Interim Budget and its broader impact.

Q1: What is the significance of the Interim Budget?

The Interim Budget holds importance as a precursor to the full Budget for the financial year 2024-25. It outlines the government’s spending priorities and policy direction until the new government forms and presents the full budget in July.

Q2: What are the key proposals of the Interim Budget?

The proposals of the Interim Budget have been developed with a focus on the entire financial year 2024-25. It is expected to be a pro-poor budget, emphasizing farmers, women, youth, and vulnerable groups like Scheduled Castes and Scheduled Tribes.

Q3: How does the Bharatiya Janata Party (BJP) plan to maintain continuity between the Interim and Full Budgets?

The BJP aims to ensure continuity between the Interim and Full Budgets for 2024-25, expressing confidence in securing a third term (2024-29). The responsible preparation of the Interim Budget aligns with the government’s commitment to implementing Budget promises.

Q4: What sectors will the Interim Budget focus on?

The Interim Budget is expected to prioritize inclusive growth with a double-digit increase in allocations for key sectors. These sectors include agriculture, rural development, micro, small, and medium enterprises (MSMEs), health, education, defence, and the Northeast region.

Q5: Will the government continue its three-year capex push?

Yes, the government plans to continue its three-year capital expenditure (capex) push, aiming to crowd in private investments and sustain economic growth. The Interim Budget’s capex proposals may be adjusted in the Full Budget based on global and domestic factors.

Q6: How does the government plan to address fiscal deficit and fund flagship programs?

The government is committed to fully funding flagship programs, ensuring continued support for initiatives like food security, fertilizer subsidies, and schemes such as the Jal Jeevan Mission, Pradhan Mantri Aawas Yojana, Startup India, and MGNREGA. Fiscal deficit targets are expected to be maintained.

Q7: What is the expected fiscal deficit trajectory?

Despite global challenges, India’s first advance estimates project robust GDP growth. The government aims to achieve the estimated fiscal deficit target of 5.9% of GDP in FY24. Fiscal deficit could gradually reduce to 5.2% in 2024-25, 4.5% in 2025-26, and 4% in 2026-27.

Q8: How has India’s economic growth been assessed?

India’s gross direct tax collections and Gross Goods and Services Tax (GST) highlight robust economic growth and enhanced compliance. The country’s first advance estimates project a higher-than-expected GDP growth of 7.3% in 2023-24.

Q9: What sectors will witness increased focus?

The Interim Budget will emphasize the active participation of states in capital expenditure, ease of living, and implementing reforms. States will play a significant role in governance changes at the district, block, and village levels, particularly in sectors like health, education, land, and labor.

Q10: Any specific focus on gender budgeting?

Yes, the budget is expected to focus on women with approximately a 30% year-on-year jump in gender budgeting, aligning with the September 2023 Delhi Declaration under India’s G20 presidency.

Q11: Are there expectations for tax provisions for new manufacturing units?

An extension of the 15% tax rate provision for new manufacturing units beyond March 31 is anticipated to attract investments in manufacturing.

Conclusion

The Interim Budget for 2024-25 sets the stage for India’s economic direction, emphasizing inclusive growth, increased allocations for key sectors, and a continued commitment to fiscal discipline. As the government aims for a ‘Vikshit Bharat’ (developed India) by 2047, the Interim Budget lays the foundation for the upcoming Full Budget, fostering stability and continuity.

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