Overview of India's Union Budget Strategies

Sep 1, 2024

Union Budget Presentation Notes

Introduction

  • Session focuses on Union Budget, declared by Finance Minister Nirmala Sitaraman.
  • This budget is historic as it aligns with Prime Minister Modi's vision for India's next 25 years (Amrit Kaal).
  • Aim: Transition India towards a developed economy.

Basics of Budget

  • Definition: Constitution refers to the budget as an "Annual Financial Statement" (Article 112).
  • Components:
    • Revenue aspect: Sources of government income.
    • Expenditure aspect: Areas where the government spends money.
    • Economic overview: Budget reflects the state of the Indian economy in a global context.

Vision for Amrit Kaal

  • Emphasis on resilience despite global challenges (e.g., geopolitical issues, recession).
  • Indian economy has rebounded post-pandemic and is growing strongly in FY 23.
  • G20 Presidency: India aims to transition from a rule taker to a rule maker, guided by the principle of "Vasudev Kutumbakam" (One Earth, One Family).

Key Themes of the Budget

  1. Opportunities for Citizens with Youth Focus:
    • Targeting demographic transition to utilize youth potential.
  2. Growth and Job Creation:
    • Importance of generating employment to support the younger population.
  3. Strong and Stable Macroeconomic Environment:
    • Ensuring fundamentals like GDP, inflation, and foreign reserves are robust.

Government Priorities in Budget

  • Seven Priority Areas:
    1. Inclusive Development:
      • Vision for equitable growth, ensuring no one is left behind.
      • Initiatives like:
        • 9 crore drinking water connections.
        • 11.7 crore household toilets under Swachh Bharat Mission.
        • 9.6 crore LPG connections via PM Ujjwala Yojana.
        • 220 crore COVID vaccinations.
        • Financial inclusion through PM Jan Dhan accounts.
        • Insurance coverage (45 crore insured).
        • PM Kisan scheme for farmers (6000/year).
    2. Agriculture:
      • Focus on digital infrastructure, agricultural funds, promoting millets, and increasing agricultural credit targets.
    3. Health:
      • Health budget increased from 1.4% to 2.1% of GDP.
      • Plans to establish 157 new nursing colleges, eliminate sickle cell anemia by 2047, and enhance pharmaceutical research.
    4. Education and Skilling:
      • Education budget at 2.9% of GDP, with initiatives for teacher training and digital libraries.
      • Launch of Pradhan Mantri Kaushal Vikas Yojana 4.0 for skill training.
    5. Infrastructure and Investment:
      • Focus on capital infrastructure (roads, railways, etc.).
      • Increased capital investment outlay by 33.4% to 10 lakh crore.
    6. Unleashing Potential:
      • Emphasis on trust in governance, promoting artificial intelligence, and supporting MSMEs (micro, small, and medium enterprises).
    7. Green Growth:
      • Commitment to sustainable practices and investments in renewable energy and natural farming.

Financial Aspects

  • Personal Income Tax:
    • Rebate level raised from 5 lakh to 7 lakh, making income up to 7 lakh tax-free.
  • Revenue Generation:
    • Major sources include borrowing, GST, corporate tax, and income tax.
  • Expenditure Focus:
    • Highest allocations to Ministry of Defense, Transport, Railway, and Consumer Affairs.
  • Fiscal Deficit:
    • Target of 6.4% fiscal deficit for FY 2023.

Conclusion

  • The budget presents a roadmap for achieving India’s potential by engaging citizens (Jan Bhagidari) and correcting past mistakes.
  • Continuous efforts to ensure India's growth trajectory post-colonial challenges.
  • Future sessions will provide detailed analysis of the budget and economic survey related to exams.

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