Village women work under MGNREGA scheme at Jagannath Prasad village in Odisha
| Photo Credit: Gerra Madhusudan 10751@Chennai

The share of the Union Budget allocated for the social sector has declined rapidly in recent years. Data show that the outlays to most schemes under the rural development, education, health, and social welfare heads have either declined or stagnated.

Table 1 shows the allocations for various social sectors as a share of the total Budget.

Expenditure on health as a share of the total Budget declined from 2.47%-2.22% in the FY18-22 period to 1.85%-1.75% in the FY23-25 period. The share of the total Budget allocated to the Ministry of Rural Development did not cross the 6%-mark in the last three years, which was the case for many years prior.

Similarly, allocations for higher education as a share of the total Budget declined from the 1.57%-1.37% range in FY17-20 to 1.27%-0.88% in FY21-25. Allocations for school education declined from the 2.18%-1.96% range to 1.61%-1.23% and allocations for social welfare schemes declined from the 1.89%-1.61% range to 1.17%-0.97% in the same period.

The reduced allocations can be better understood at the scheme level. Table 2 shows the allocations for various social sector schemes as a share of the total Budget.

Notably, allocations for schemes such as the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), introduced under the United Progressive Alliance government, have declined significantly over time.

The ₹86,000 crore (Budget Estimates) allocated for MGNREGS for 2024-25 formed only 1.78% of the total Budget, a 10-year low. Latest data show that the Rural Development Ministry was short of ₹4,315 crore, which resulted in a delay in the disbursement of wages to MGNREGS workers.

Allocation for the national social assistance programme, which includes old age pension, widow pension, and disability pension, has declined as a share of the total Budget from the range of 1.21%-0.36% in the years FY19-21 to about 0.2% in the last four years.

The allocations for the Pradhan Mantri Poshan Shakti Nirman (PM-POSHAN) scheme as a share of the total Budget declined to 0.26% in FY25 (Budget Estimates) — the lowest in the last nine years — except FY24 (Revised Estimates).

The primary objective of the scheme is to improve the nutritional status of children studying in Classes 1 to 8 in eligible schools. It was earlier known as the National Programme of Mid-Day Meals in Schools.

There were some exceptions to this trend: allocations under the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY), the Pradhan Mantri Awas Yojna (PMAY)-Rural, and PM Schools for Rising India (PM SHRI) as a share of the total Budget were on an increasing trend or at least stagnating. Notably, all these schemes were launched post 2014.

With the Budget for the next financial year set to be presented on February 1, it will be crucial to examine how the declining allocations for the social sector are being addressed. The sector has under its umbrella a host of important schemes, as shown in Table 3. The table shows major expenditure heads under each social sector.

The number in the table corresponds to a scheme/expenditure head’s share in each sector’s total budget. For instance, about 33% of the health budget for the current year went to a flexible pool to be used by States for their health needs and 20.6% was allocated to autonomous bodies such as AIIMS. Close to half of the rural development budget was given to MGNREGS and over 30% went to PMAY-Rural.

Source: The data for the charts were sourced from Union Budget documents

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Today, March 15, 2024, marks the final deadline for taxpayers in India to settle their fourth and final installment of advance tax for the financial year 2023-24. Missing this deadline can result in penalties and interest charges.

Advance tax allows taxpayers to spread out their income tax payments throughout the year, rather than paying a large sum at the end of the financial year. This system ensures a steady flow of tax revenue for the government.

Who Needs to Pay Advance Tax?

Salaried individuals, freelancers, and businesses: If your total tax liability is expected to be more than Rs 10,000 for the financial year, you are required to pay advance tax.

Senior citizens: Those aged 60 and above who do not have business income are exempt. However, senior citizens with business income must pay an advance tax.

Presumptive income taxpayers: Businesses and professionals under the presumptive taxation scheme (sections 44AD and 44ADA) have the option to pay their entire advance tax in one go by March 15th or by March 31st.

How To Pay Advance Income Tax?

Eligible taxpayers are required to make advance income tax payments in four installments throughout the financial year, typically in June, September, December, and March. These payments can be made conveniently online via either the official website of the Income Tax Department (incometaxindia.gov.in) or the National Securities Depository.

Act Now To Avoid Penalties

The Income Tax Department urges all taxpayers to settle their advance tax dues before the deadline.
Failure to do so can lead to interest charges under sections 234B and 234C of the Income Tax Act.

For more information on advance tax and how to calculate your liability, taxpayers can visit the Income Tax Department’s website.

The income tax department has launched an electronic campaign for taxpayers who have carried out significant transactions in the current financial year. Such taxpayers will be informed through email and SMS, with the department urging them to deposit their due advance tax on or before March 15, 2024. The campaign was started after the income tax department identified individuals and entities with discrepancies between transactions carried out and the tax deposited. The department said that the aim of this campaign is to encourage such taxpayers to deposit the “right” amount as tax.

“The Income Tax Department has received certain information on specific financial transactions undertaken by persons or entities during the financial year 2023-24. On the basis of an analysis of the taxes paid so far during the current financial year, the Department has identified persons /entities whose payment of taxes for FY 2023-24 (A.Y. 2024-25) is not commensurate with the financial transactions made by the persons/entities concerned, during the said period,” the income tax department said in a release on Sunday.

The department receives information of specified financial transactions of taxpayers from various sources. To increase transparency and to promote voluntary tax compliance, this information is reflected in the Annual Information Statement (AIS) and is available to the persons/entities for viewing. Officials said that the value of ‘Significant Transactions’ in the AIS has been used for carrying out this analysis.

What is advance tax?

It is the income tax that is paid in advance instead of lump sum payment. In other words, it is the tax that individuals pay as they earn. These payments have to be made in instalments as per due dates provided by the income tax department.

Who needs to pay advance tax?

Salaried individuals, freelancers and businesses with a total tax liability of Rs 10,000 or more in a year need to pay advance tax. In case of senior citizens (people aged 60 or more), and do not run a business, are exempt from paying advance tax. This is applicable only to those who have business income.

Further, taxpayers who have opted for the presumptive taxation scheme under Section 44AD have to pay the whole amount of their advance tax.