Polity Notes
Union Interim Budget (Vote-on-account)(2024-2025)
Meaning of Interim Budget or (Vote-on-account): Through the interim budget parliament passes a vote-on-account that allows the Government to meet the expenses of the administration until the new parliament considers and passes the budget for the whole year. We may call it a temporary budget for a particular short period of time. In the General Election (Lok Sabha Election Year), the Union Government only presents the Interim Budget and the new Government which will be formed after the elections will present the Regular Budget of 2024 – 2025 in July 2024.
The Union budget is the annual financial report of India, an estimate of income and expenditure of Government of India on a periodical basis. As per Article 112 of the constitution it is a compulsory task of the Union Government.
The first budget of India was presented on 18th February 1860 by Mr. Scotsman James Wilson. The First budget of independent India was presented by Sh. RK Shanmukham Chattiy on 26th November 1947.
The Union budget is prepared by the Union Finance Ministry and is presented by the Union Finance Minister in the Parliament on 1st February of every year.
Previously, the Union budget used to be presented on the last day of February each year, but the Modi government changed this date to 1st February of every year from the year 2017 so that the legislative approvals for annual spending plans and tax proposals could be completed before the beginning of the new financial year on 1st April. There used to be a separate Rail Budget as well, but the Modi Government withdrew the practice of separate rail budget and general budget. Now only the general budget is introduced in parliament every year from the year 2017.
Sh. Moraji Desai presented the Union budget for maximum number of times (10 times).
The Union finance Minister Smt. Nirmala Sita Raman presented her 2nd Interim budget for the period of 01.04.2024 to 31.03.2025 in the parliament on 1st February 2024. This is her 6th budget. This is our paperless budget presented on tab (Tablet) kept inside traditional Bahi Khata instead of briefcase.
Highlights of Union Budget 2024-25
• Size of the budget- Rs. 47-66 Lakh Crores estimated to be spent by Union Government during the year 2024-2025.
• No change in the direct/indirect tax rates
• No change in Income Tax Rates
• Rs. 38.31 Lakh Crore Gross Tax revenue target (Rs. 21.99 Lakh Crore Direct tax collection target & Rs. 16.32 Lakh Crore Indirect tax collection target¬)
Estimate of sources of Income and Expenditure of Union Government (2024-2025)
SYLLABUS
| One Rupee come from | One Rupee goes to | ||
|---|---|---|---|
| Borrowings and other liabilities | 28P | Borrowings and other liabilities 28P Interest payment | 20P |
| GST and other taxes | 18P | States share of taxes and duties | 20P |
| Corporation tax | 17P | Central sector scheme | 16P |
| Income Tax | 19P | Finance commission and other transfers | 8P |
| Union excise duties | 5P | Other expenditure | 9P |
| Nontax revenue Receipts | 7P | Centrally sponsored schemes | 8P |
| Customs | 4P | Defense | 8P |
| Non debt capital Receipts | 1P | Subsidies | 6P |
| pensions | 4P | ||
| Total | 100P | Total | 100P |
Income from Income Tax is estimated to be the biggest source of revenue of Union Govt followed by GST in the financial year 2024-2025.
KEY HIGHLIGHTS OF INTERIM BUDGET 2024-2025
Union Finance Minister Nirmala Sitharaman presented her sixth Budget on February 1st.
This was an interim budget ahead of the general elections in April/May this year.
The Interim Budget 2024 was focused on youth and women empowerment, while maintaining fiscal consolidation and continuing capex. FM Sitharaman lowered down FY25 fiscal deficit target to 5.1% of the GDP.
There were no changes made to the direct tax and indirect tax rates.
1. Finance Minister Nirmala Sitharaman stressed on 5 'Disha Nirdashak' baatein: Social justice as an effective governance model; Focus on the poor, youth, women, and the Annadata (farmers); Focus on infrastructure; Use of technology to improve productivity and High-power committee for challenges arising from demographic challenges.
2. India has had three consecutive years of 7% GDP growth and is the fastest growing economy in G20.
3. GDP is Government, Development and Performance. We have delivered on Development and have better managed the economy. We are bringing down the fiscal deficit despite very challenging times.
4. Capex from the government will continue, it is important to continue it, FM said.
5. India, Middle East, European Corridor (IMEC) project to be taken forward despite disturbances in Red Sea.
6. The withdrawal of 1.1 crore outstanding small direct tax demands for certain years will cost less than Rs. 3,500 crores to the exchequer.
7. No extension of the lower tax rate to new manufacturing units coming into place after March 2024.
8. Do not have a fixed target for disinvestment in FY25.
9. We are not only aligning with the fiscal consolidation path given earlier, but we are also bettering it.
10. The relevance of the target to reduce the Centre's debt-to-GDP ratio to 40% was set before COVID-19 period and now must be examined.
PLEASE NOTE-
India is the 5th largest economy in the world in terms of GDP.
USA 26.95 trillion US $
CHINA 17.78 trillion US $
GERMANY 4.43 trillion US $
JAPAN 4.23 trillion US $
INDIA 3.73 trillion US $
We will be the 4th Largest Economy by the end of 2024 and 3rd Largest economy in 2029. We want to make India a 5 trillion US $ economy by 2029 and a developed country by 2047. When Modi Government came to power in 2014, our position was tenth in the world in terms of GDP.