Congress general secretary Jairam Ramesh. File
| Photo Credit: PTI

The Congress on July 12 said the forthcoming Budget must address fundamental questions such as why private investment is “very sluggish” and private consumption is not picking up as the party dismissed claims that economic growth is accelerating sharply and large numbers of jobs being created.

Union Finance Minister Nirmala Sitharaman is scheduled to present the Budget for 2024-25 in the Lok Sabha on July 23.

Congress general secretary, in-charge communications, Jairam Ramesh said, “The non-biological PM’s cheerleaders and drumbeaters claim that economic growth is accelerating sharply and that jobs are being created in large numbers. But if this was the case — and it is not — Why is private investment, a key engine of economic growth, still so very sluggish recording a 20-year low during April-June 2024? Why is private consumption, another key engine of economic growth, not picking up except at the high end,” Mr. Ramesh asked.

“Why have household savings plummeted to record lows and household debt shot up to record highs? Why have rural wages continued to fall and why is the wage share of national income declining?” he said, adding, why is manufacturing as a share of GDP at a record low and still decreasing? Why has the informal sector lost 17 lakh jobs in the last seven years? Why did unemployment reach a 45-year peak, with unemployment for young graduates at 42%?” the Congress general secretary said.

“These are fundamental questions that the forthcoming Budget will have to address while the Finance Minister sings praises of the non-biological PM,” Mr. Ramesh said.

On Thursday, the BJP claimed that around 12.5 crore jobs were created in the last 10 years of the Modi government and cited the latest Reserve Bank of India report to assert the creation of “five crore jobs in 2023-24 alone”.

Several experts have urged the government to provide tax relief to the common man to boost consumption and take steps to check inflation and accelerate economic growth.

The economy has recorded a growth rate of 8.2% in 2023-24. Earlier in February, Ms. Sitharaman presented an Interim Budget for 2024-25 in view of the Lok Sabha elections.

Illustration: Soumyadip Sinha

Finance Minister Nirmala Sitharaman, presenting her sixth Union Budget and her first Interim Budget, resisted the temptation to hand out dramatic pre-poll sops like the ones unveiled ahead of the 2019 Lok Sabha election, opting instead to bank on the government’s track record and the promise of “unprecedented development” in the next five years.

While broadly sticking to her assurance that this 2024-25 Budget would be a ‘vote on account’, without “spectacular announcements”, Ms. Sitharaman painted an elaborate picture of India’s imperfect past prior to 2014, with the economy and governance needing serious mending. She then outlined how the NDA government, with a ‘nation-first’ approach, had enabled the transition to a virtually perfect present.

Painting a rosy picture

“It is now appropriate to look at where we were then till 2014 and where we are now, only for the purpose of drawing lessons from the mismanagement of those years,” Ms. Sitharaman said, promising a white paper in the House on the mess allegedly inherited by the Narendra Modi-led government and the economy’s subsequent resurgence to a path of sustainable, high growth.

Analysis | Nirmala Sitharaman’s interim Budget reveals BJP’s confidence in comeback

“People are living better and earning better, with even greater aspirations for the future. Average real income of the people has increased by 50%. Inflation is moderate,” she underlined.

New housing scheme

Though there were no tax breaks, some immediate promises were made, including a scheme to enable the “deserving” urban middle class to buy or build their own homes, two crore more rural houses to be built in the next five years, and 300 units of free power a month for one crore households through rooftop solar solutions, as mooted by Prime Minister Narendra Modi after the Ram Mandir’s consecration last month.

Finance Secretary T.V. Somanathan said the contours for the new housing scheme — which does not directly refer to urban households, but hints at them by picking beneficiaries from chawls, slums or unauthorised colonies — will be finalised before funding the plan.

Apart from a few such feel-good promises, the Finance Minister committed to work with States and stakeholders to implement “next generation reforms” in its next tenure. At the full Budget in July, the government plans to present a detailed roadmap for its vision of a developed India by 2047, she said, enunciating some guiding principles that will drive its approach.

Poll signals

Ms. Sitharaman also made it a point to emphasise that the government is committed to turning the eastern parts of India — Bihar, Jharkhand, West Bengal, Odisha, and Chhatisgarh — into the growth engines of the economy in the coming Amrit Kaal, a term used for the period leading up to 2047. Another plausible poll signal was the constitution of a high-powered panel to consider the challenges arising from “fast population growth and demographic changes”, although she parried queries on the intent of this move in her post-Budget press conference.

Terming ‘social justice’ an effective and necessary governance paradigm, the Minister argued that what was mostly a political slogan in the past has been achieved by this government, through a “saturation approach of covering all eligible people” to address systemic inequalities in society. “This is secularism in action, reduces corruption, and prevents nepotism,” she asserted, adding that the four major castes identified by the PM – the poor, women, youth and farmers — would receive primacy in policy.

There were no philosophers or poets quoted in her speech, which was about 25% shorter than the President’s Wednesday address that had also embellished the government’s achievements. Instead, Ms. Sitharaman invoked the PM’s speeches and beliefs about half a dozen times before she wrapped up.

Stringent fiscal discipline

While some hopes — for measures to spur consumption and rural demand against the backdrop of a poor monsoon, and to prod private investments — were dashed, Ms. Sitharaman’s fiscal discipline surprised most economists, who had expected this year’s fiscal deficit target (5.9% of GDP) to be breached. The FM not only revised the deficit estimate for this year to 5.8% of GDP, but also committed to hit the 5.1% mark in 2024-25, with a firm eye on bringing the fiscal gap to or below 4.5% of GDP in 2025-26.

Capital expenditure plans for the coming year got a modest but assured 11.1% increase, rising to an ostensbily auspicious number of ₹11,11,111 crore, and interest-free capex loans to States were raised to ₹1.3 lakh crore. Yet, gross and net borrowings planned in 2024-25 have been lowered from this year’s levels to ₹14.13 lakh crore and ₹11.75 lakh crore, respectively.

Interim Budget 2024 | Govt to come out with White Paper on mismanagement of economy prior to 2014, says Sitharaman

“Now that the private investments are happening at scale, the lower borrowings by the Central government will facilitate larger availability of credit for the private sector,” Ms. Sitharaman hoped, marking a prudent return to the tradition of keeping Interim Budgets low on profligacy and high on intent.

The announcement in the Interim Budget 2024 of providing rooftop solar power generation to one crore households has come as a response to multiple guarantees of free power by different political parties in different States, including in Delhi and Punjab by the Aam Aadmi Party and the Congress in others.
| Photo Credit: AP

Finance Minister Nirmala Sitharaman’s Budget speech on Thursday followed the norm of not announcing any new tax proposals as the country gets ready for the Lok Sabha election in a couple of months, but her political messaging was very clear — she asserted that the Modi government would return in July to present a full Budget, on the strength of its record, and that it did not need announcements of last minute sops to go into the polls. “Confidence over continuity,” as Prime Minister Narendra Modi put it in his post-Budget remarks.

Also Read | Budget 2024 live updates

“In the full Budget in July, Mr. Speaker, our government will present a detailed roadmap for the pursuit of ‘Vikasit Bharat’,” she said to table thumping by her parliamentary colleagues. Later Union Minister Bhupendra Yadav tweeted this portion of Ms. Sitharaman’s speech with the caption “In July 2024….” to reiterate the point. Almost two thirds of Ms. Sitharaman’s speech was based on achievements of the government in its 10-year tenure.

One of the most politically interesting announcements was on the programme to provide rooftop solar power generation to one crore households, as part of the Pradhan Mantri Suryodaya Yojana. It has come as a response to multiple guarantees of free power by different political parties in different States, including in Delhi and Punjab by the Aam Aadmi Party and the Congress in others.

Also Read | Interim Budget 2024: Highlights

Mr. Modi has spoken out against the “rewri” or freebie culture and therefore, this announcement, of making provisions for free power, not by declaring it as free, but under a subsidy model for the initial installation of solar panels etc, and some outlay by the beneficiary themselves is a political-economy response to what is now a political and fiscal challenge in many States in India. “Imagine you have given free power without driving the State exchequer and power distribution companies bankrupt,” said a source in the government.

There was also an acknowledgement that subsidised housing under Pradhan Mantri Awaas Yojana had continuing demand as more and more families have come under its ambit, and therefore an announcement that two crore more houses will be made was done.

Also Read: Puffed-up and poll-ready: Nirmala Sitharaman’s first Interim Budget

An interesting announcement with political ramifications was of setting up a committee to look at the whole issue of population and changes in demography. “Since it was announced by the Finance Minister, you can be sure that this committee will be looking at the question of population not just as a demographic issue but also economic, which will inform policies after that. Till now, the question of growing population or certain population trends was only a demographic question,” said a source in the government.

The Budget also saw the announcement that a White Paper to look at where the economy was in 2014, and where we it is now. “It is now appropriate to look at where we were then till 2014 and where we are now, only for the purpose of drawing lessons from the mismanagement of those years. The government will lay a White Paper on table of the House, Ms. Sitharaman said.

Also Read | Govt to take up next-generation reforms to facilitate growth: Sitharaman

“The White Paper is basically going to look at the change in the way the economy was handled under Prime Minister Modi, of growth generated by expenditure,” said a source.

As India prepares to go into the Lok Sabha polls, the BJP, if we go by Ms. Sitharaman’s speech is depending on its record for a third successive win.

India’s Finance Minister announced a new scheme to develop deep tech for defence purposes while presenting the Interim Budget for 2024-25.
| Photo Credit: SHIV KUMAR PUSHPAKAR

For tech-savvy youth, a corpus of ₹1 lakh crore will be established with 50-year interest free loans for providing long term financing or refinancing with long tenures and low or nil interest rates, announced Finance Minister Nirmala Sitharaman while presenting the Interim Budget for 2024-25.

“This will encourage the private sector to scale up research and innovation significantly in the sunrise domains,” she added.

The Finance Minister also said that a new scheme will be launched to develop deep tech for defence purposes.

On electric vehicles, she informed Parliament that government will expand and strengthen the sector through greater manufacturing and charging infrastructure.

(For top technology news of the day, subscribe to our tech newsletter Today’s Cache)

The government has allocated ₹1,500 crore for setting up semiconductor fabs in India under the Modified Scheme, she said.

Counting the achievements of Union Government, the FM said that the Skill India Mission has trained 1.4 crore youth, upskilled and reskilled 54 lakh youth. She added that 3,000 new Industrial Training Institutes (ITIs) were opened.

Nirmala Sitharaman informed that in the last ten years 7 Indian Institutes of Technology (IIT), 16 Indian Institutes of Information Technology (IIIT), 7 Indian Institutes of Management (IIM), 15 All India Institute of Medical Sciences (AIIMS) and 390 Universities have been set up in the country.

She briefed that ₹34 lakh crore worth of Direct Benefit Transfer (DBT) has been achieved in the last decade, and it saved ₹2.7 lakh crore of government as a result.

More than 1360 Agricultural Produce Marketing Committees (mandis) have been digitised, doing a business of 3 lakh crore, she told.

FM informed the house that Digital Public Infrastructure (DPI) has been instrumental in formalisation of the economy.

“Technological advancements are transforming lives and businesses, creating new economic opportunities,” she said.

Terming the Interim Budget presented by Union Finance Minister Nirmala Sitharaman as “progressive”, veteran BJP leader B. S. Yediyurappa complimented her for presenting a realistic Budget that will improve the standard of living of people.

The former Karnataka Chief Minister said the Budget reaffirms the commitment of the BJP government towards building a strong, empowered, developed and a “Vishwaguru” India in the coming days, which will complement the progress of the country. 

“Hearty congratulations to the Finance Minister Nirmala Sitharaman, who has presented the country’s ‘progressive Budget’ to further strengthen the country’s economy, and towards realisation of Prime Minister Narendra Modi’s concept of Navabharat,” Yediyurappa posted on social media platform X.

“Without presenting the Budget of pre-election popular slogans, through this Interim Budget, the Union Finance Minister has presented a realistic Budget that will improve the standard of living of our youth, farmers, women and especially the backward and vulnerable sections of the people, creating new hope and opportunities,” he added. – PTI

Agriculture and allied sector players termed the Interim Budget 2024-25 as a promising roadmap for strengthening agriculture, agrochemical, dairy sectors by encouraging investment in research and development, technology and warehousing that will empower farmers and their livelihood.

“The Interim Budget 2024-25 reiterates the government’s commitment to strengthening the ‘Annadata’ and backbone of our nation – our farmers. From direct financial assistance through PM-KISAN SAMMAN Yojana to expanding farmer-centric policies and promoting innovations, the budget paves the way for inclusive, sustainable growth in the agricultural sector,” Godrej Agrovet Managing Director Balram Singh Yadav said.

Parag Milk Foods Chairman Devendra Shah said with the focus on the agriculture sector, the announcement of a comprehensive program for dairy farmers, coupled with efforts to control foot and mouth disease, is a positive step.

“The commitment to promote indigenous breeds and fostering research and development in the dairy sector through government schemes lays the foundation for increased productivity and sustainable growth,” he added.

Warehousing services provider Sohan Lal Commodity Management (SLCM) Group founder and CEO Sandeep Sabharwal said that the impetus given to post-harvest activities in the Interim Budget is a welcome step.

“It is a positive move to encourage private-public partnerships and address the diverse ambit of post-harvest agricultural logistics, including storage, supply chain as well as primary and secondary storage. In addition to the one crore women already coming under the purview of Lakhpati Didis, the government now intends to incorporate 3 crore new Lakhpati Didis under the scheme, and we hope it transforms several lives in the Indian agri space across the rural parts of the country,” he added.

Deloitte India Partner and Consumer, Products and Retail sector Leader, Anand Ramanathan commented that the Interim Budget 2024-25, continues to support growth and productivity in agriculture through interventions in crop insurance, encouraging use of nano fertilisers, promoting self-sufficiency in oilseed production, and increasing investments in micro food processing.

“Also, from a protein standpoint – boosting dairy productivity and supporting sea food exports are some of the big areas of focus. These announcements will provide employment opportunities for the rural economy,” he stated.

Dhanuka Agritech Managing Director MK Dhanuka said, “The announcement to further encourage private and public investment in areas of post-harvest activities including aggregation, modern storage, efficient supply chains, primary and secondary processing and marketing and branding is a laudable step.” “The decision to promote the application of nano DAP on various crops in different agro-climatic zones is in line with the government’s vision of promoting technological advancement in the rural sector.” KC Ravi, Chief Sustainability Officer, Syngenta India and Chairman Crop Life India, said that the robust physical-digital-social infrastructure developed in the last decade has given the economy a good foundation for a Viksit Bharat by 2047.

Digital infrastructure and infusion of technology is imperative to not only sustain the momentum but also to take the agriculture growth story to its logical conclusion. he said.

Agritech start-up Otipy’s founder and CEO Varun Khurana said the encouragement for private and public investment in post-harvest activities is commendable, promising a more resilient and sustainable agricultural ecosystem.

“The commitment to modernise the farm sector, focusing on improved storage, efficient supply chains, and branding, reflects a strategic vision to enhance the overall efficiency and competitiveness of Indian agriculture.

These measures align with the contemporary needs of the sector and are crucial steps towards ensuring long-term prosperity for farmers and fostering growth in the agritech landscape,” he noted.

Insecticides India Managing Director Rajesh Aggarwal said the continuation of flagship schemes such as the PM Kisan Samman Yojana and PM Fasal Bima Yojana, providing direct financial assistance and crop insurance respectively, exemplifies the government’s dedication to safeguarding the livelihoods of our farmers.

“We are particularly encouraged by the emphasis on technology adoption and innovation in agriculture. The integration of 1,361 mandis into the Electronic National Agricultural Market, serving 1.8 crore farmers, is commendable. Furthermore, the budget’s focus on modern storage, supply chains, and branding, will encourage private and public investment in post-harvest activities,” he said.

Arya.ag co-founder and CEO Prasanna Rao commented that the Budget’s commitment to boost both private and public investment in post-harvest infrastructure will go a long way in enhancing the outcomes.

“It will not only lead to a reduction of losses but also elevate productivity. Additionally, the expansion of Nano DAP and the commitment to oilseed self-reliance are pivotal and significant steps in achieving sustainable agricultural advancement,” he added. — PTI

Watch | Interim Budget 2024 | What’s in it for health sector?

| Video Credit:
Richard Kujur

Health cover under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana will be extended to all Accredited Social Health Activist (ASHA) and anganwadi workers and helpers said Finance Minister Nirmala Sitharaman on Thursday, while announcing the interim Union Budget 2024-25.

While a full budget for 2024-25 will be announced after the new government is formed following the Lok Sabha elections later this year the budget allocation saw an increase from ₹89,155 crore in 2023-24 to ₹90,658.63 crore for the Ministry of Health and Family Welfare while Ayush Ministry also saw a hike from ₹3,647.50 crore to ₹3,712.49 crore.

Budget 2024 live | Interim budget leaves tax structure untouched; FM details Centre’s achievements

For the health sector, the Minister added that India will be bringing in the services of the newly designed U-WIN platform for managing immunisation and intensified efforts of Mission Indradhanush.

“This is to be rolled out expeditiously throughout the country,” the Minister said during her nigh hour long speech.

The other major addition in the sector includes utilising the existing hospital infrastructure under various departments to offer medical seats to students and encouraging HPV vaccination for girls in the age group of 9 to 14 years for prevention of cervical cancer.

The government also proposed to combine various schemes for maternal and childcare and bring them under one comprehensive programme for synergy.

The Minister added that, as part of the Skill India Mission, youth are being trained through various world-class institutes including 15 newly constructed All India Institute of Medical Sciences.

“Several youth have the ambition to get qualified as doctors. They aim to serve our people through improved healthcare services. Our Government plans to set up more medical colleges by utilizing the existing hospital infrastructure under various departments. A committee for this purpose will be set-up to examine the issues and make relevant recommendations,” the Minister said.

The Minister added that geopolitically, global affairs are becoming more challenging with wars and conflicts.

“Globalisation is being redefined with reshoring and friend-shoring, disruption and fragmentation of supply chains, and competition for critical minerals and technologies. A new world order is emerging after the COVID-19 pandemic,” the Minister said. The budget also announced upgradation of Anganwadi centres under ‘Saksham Anganwadi’ and Poshan 2.0 will be expedited to improve nutrition delivery, early childhood care, and development.

The sectors that saw increased allocation of funds in the last 2023-24 budget included Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana, CGHS pensioners, and the National AIDS and STD programme. This year continued with that trend although allocation for development of nursing services did witness a drop.

A farmer at his paddy field on the outskirts of Bhubaneswar. File (Representational image only)
| Photo Credit: The Hindu

Finance Minister Nirmala Sitharaman on February 1 said as many as 11.8 crore farmers were provided financial assistance under the PM KISAN Yojana.

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is one of the world’s largest Direct Benefit Transfer (DBT) schemes.

Also Read | Budget 2024 live | FM Nirmala Sitharaman focusses on women, poor, youth and farmers in Budget

Under the PM-KISAN scheme, the government provides a financial benefit of ₹6,000 per year in three equal four-monthly instalments. The money is transferred into the bank accounts of farmers’ families across the country through DBT mode.

Announced in February 2019 in the Interim Budget, the scheme was effective from December 2018.

“Modi government addresses systematic inequalities”

The government under the leadership of Prime Minister Narendra Modi is addressing systematic inequalities, which have plagued the society, Finance Minister Nirmala Sitharaman said.

Also Read | Interim Budget 2024: Highlights

Presenting the Interim Budget 2024-25, Ms. Sitharaman said economic management over the past decade has complemented people-centric inclusive development. “All forms of infrastructure are being built in record time,” she said. She observed that tax reforms have led to widening of the tax base.

“STEM (Science, Technology, Engineering, and Mathematics) courses have seen enrolment of 43% women, the highest in the world,” she added.

Union Finance Minister Nirmala Sitharaman addresses the media during a press conference on G-20 Leaders’ Summit. File.
| Photo Credit: ANI

India’s external debt of $624.7 billion at March-end 2023 with a debt-service ratio of 5.3% is within the comfort zone and modest from a cross-country perspective, Finance Minister Nirmala Sitharaman has said.

In her foreword to ‘India’s External Debt: A Status Report 2022-23’ released earlier this month, Ms. Sitharaman said the ratio of external debt to GDP declined to 18.9% at March-end 2022-23 from 20% a year ago.

The long-term debt constituted 79.4% of total external debt, while short-term debt, which is 20.6% of the total external borrowing, is basically incurred to finance imports, enhancing the stability aspects of the total external debt, she said.

“From a cross-country perspective, India’s external debt position is better than most of the low and middle-income countries (LMICs) as measured by select vulnerability indicators, such as share of short-term debt in total external debt, external debt to GNI (Gross National Income), forex reserves to external debt and external debt to exports,” the Minister noted.

Marginal increase

The report said the debt-service ratio during 2022-23 increased marginally to 5.3 % from 5.2 % during the previous year, mainly due to a rise in debt service payments from $41.6 billion in 2021-22 to $49.2 billion in 2022-23.

The debt-service ratio is measured by the proportion of gross debt service payments (both principal and interest) to external current receipts, which indicates the extent of pre-emption of forex reserves for the purposes of repayment of principal and interest out of the stock of foreign debt.

The increase in gross external debt service payments during 2022-23 was due to the combined impact of an increase in debt service payments under commercial borrowings, including through multilateral and bilateral sources (16.7 %), external assistance (17.2%) and an increase under NRI deposits (31.7%), the report said.

India’s external debt at $624.7 billion as of March-end 2023 is marginally higher by 0.9% or $5.6 billion over the previous year. Foreign exchange reserves covered 92.6% of the external debt at March-end 2023, it added.

New Delhi:

Finance Minister Nirmala Sitharaman today said the government’s top priority is to tame inflation to ensure sustained economic growth.

Addressing the B20 Summit India, being hosted by the Confederation of Indian Industry (CII), the minister said the GDP numbers for the first quarter, to be released this month, should be good.

Observing that elevated interest rates for considerable time hampers recovery, Ms Sitharaman said, “my priority is to tame inflation.”

Retail inflation soared to a 15-month high of 7.44 per cent in July, mainly on account of spiralling prices of tomatoes and vegetables.

On growth, she said that India has been able to accelerate the pace of economic reforms and the first quarter GDP numbers “should be good”.

The National Statistical Office is scheduled to release the GDP numbers for the first quarter on August 31.

Ms Sitharaman said that “green shoots’ of private capital expenditure can be felt on back of the government’s push for capital expenditure in the budget.

She also spoke about climate financing and reforms being undertaken by the government to attract foreign investments as they are vital for economic growth.
 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)