LAST BUDGET BEFORE ELECTIONS
During her Budget speech, Finance Minister Nirmala Sitharaman highlighted the remarkable evolution of the Indian economy over the past decade. She emphasized that the Modi government has successfully implemented structural reforms and introduced programs that benefit the people. Sitharaman also mentioned the government’s commitment to fiscal consolidation, aiming to reduce the fiscal deficit to 4.5% by 2025-26. Interestingly, she did not suggest any alterations in taxation and expressed the government’s intention to maintain the existing tax rates for both direct and indirect taxes, including import duties.
Key Highlights of the Interim Budget 2024
Regarding the allocation for MGNREGA...
Ms. Sitharaman emphasized that the allocation for MGNREGA is determined based on the demand from the grassroots level. She also highlighted that the CAG has already raised concerns about the implementation of MGNREGA in certain states, where claims need to be verified. She questioned whether the individuals receiving wages are genuinely present on the ground and raised other important questions regarding the program’s objectives.
According to Ms. Sitharaman, the CAG reports themselves identify areas where corrective measures are required in these states. She emphasized the need to address these issues separately from the allocation, regardless of whether it is decreasing or not.
India-Middle East-Europe Economic Corridor
The Finance Minister expressed the government’s commitment to advancing the India-Middle East-Europe Economic Corridor despite the geopolitical conflicts. She acknowledged the challenges posed by the disturbances in the Red Sea area and the Middle East but emphasized the long-term implications of this project for regions extending up to Europe. She assured that the government will thoroughly consider and address all aspects of the corridor, indicating a comprehensive approach towards its development.
Revamping Railway Coaches to Vande Bharat Standard
Ms. Sitharaman emphasized that the conversion of railway coaches to the Vande Bharat standard is solely the responsibility of the railways. She highlighted the distinction between Vande Bharat trains and these coaches, stating that they are separate entities. She further explained that the existing coaches may not be able to handle the desired speed for improving high-density areas. Therefore, the focus is on upgrading the quality of the coaches to meet the Vande Bharat standard. The decision regarding which lines these coaches will be connected to and the subsequent rationalization of ticket prices will be determined by the Railways. In conclusion, the objective is to achieve an overall upgradation in the railway system.
Sitharaman has outlined the specific areas that will be the focus of our budget presentation in July.
Ms. Sitharaman addressed a query about the nature of the budget prior to elections. She emphasized that we have predominantly maintained the vote-on-account as a vote-on-account. However, she also demonstrated our plans for the future trajectory of the economy and the specific targets we will focus on when unveiling the budget in July.
Major announcements in the interim budget
During her press conference, the Finance Minister shed light on the significant announcements made in the Interim Budget. These include the provision of 2 crore more homes under the PM AWAS yojana, focusing on housing for the middle class. Additionally, there will be a push for rooftop solar power generation, aiming for at least 300 units. The target for Lakhpati Didi will be enhanced, and efforts will be made to prepare and empower MSMEs to grow and compete globally. The Eastern region, comprising Bihar, Odisha, Jharkhand, West Bengal, and Chhattisgarh, will receive special attention. Next generation reforms are also on the agenda, along with the development of three major corridors for railways and the introduction of 40,000 coaches to the level of Vande Bharat. Urbanization will be emphasized, with a focus on metro projects and the NaMo Bharat initiative. Furthermore, a corpus of Rs. 1 lakh crore will be allocated for research and innovation, and tourism will receive a significant boost.