New Delhi:
The government has allocated Rs 15.27 lakh crore for major sectors, ranging from defence and rural development to social welfare and commerce, Finance Ministry data said Tuesday afternoon, shortly after Finance Minister Nirmala Sitharaman delivered a record seventh budget of her tenure.
The data also indicated that around 21 per cent of government expenditure goes to paying states’ share of taxes and duties. Around 19 per cent is spent on interest payments and 16 per cent on central sector schemes, with subsidies, pensions, and other payments contributing 19 per cent.
Government revenue is divided between borrowings and other liabilities, which accounts for a massive 27 per cent of the incoming cash, income tax revenue of around 19 per cent, and GST and other taxes of around 18 per cent. Corporation taxes account for around 17 per cent, the data showed.
Defence
Of the total amount, the government has allocated nearly 30 per cent, or Rs 4.54 lakh crore for the defence sector. This is a significant drop from the Rs 6.21 lakh crore set aside in the interim budget.
In the interim budget – presented by Ms Sitharaman in February as a stop-gap ahead of the April-June general election – the government spoke of “deep-tech” technologies in the military domain.
In the interim budget a total of Rs 1.72 lakh crore was set aside for the military for capital expenditure; this usually includes purchase of weapons and ammunition, aircraft, and warships.
For FY2023/24, the allocation for military capital outlay was Rs 1.62 lakh crore.
Rural Development
Overall, the FY24/25 allocation is also lower than the Rs 5.94 lakh crore in last year’s budget.
The next highest provision on this list is Rs 2.66 lakh crore for rural development.
This will include expenditure on rural infrastructure projects and increased outlay for the popular MGNREGA, or the Mahatma Gandhi National Rural Employment Guarantee Act.
Funding for MGNREGA has increased from Rs 60,000 crore in FY24 to Rs 86,000 in FY25.
In the interim budget, the Rural Development Ministry had been given nearly Rs 1.85 lakh crore, including Rs 7,000 lakh crore from the balance of the Agriculture Infrastructure and Development Fund for purposes of financing the PMGSY. The budget outlay for FY24 was Rs 1.57 lakh crore.
Agriculture, Allied Activities
Agriculture and allied activities will be given a budget of Rs 1.52 lakh crore, Ms Sitharaman said.
In her speech the Finance Minister outlined initiatives that focus on sustainable practices – including guiding one crore farmers to ‘natural farming’, digital infrastructure, and increased production.
READ | Rs 1.52 Lakh Crore For Agriculture, Allied Sectors: N Sitharaman
This move towards natural farming is to promote sustainable agricultural practices and reduce dependency on chemical fertilisers and pesticides. Natural farming not only enhances soil health and biodiversity, but also reduces cost of cultivation, thus increasing farmers’ profitability.
Home Affairs
A total of Rs 1.51 lakh crore has been set aside for the Union Home Ministry.
A chunk of this is for central police forces, such as the CRPF (Central Reserve Police Force), BSF (Border Security Force), and CISF (Central Industrial Security Force), which are, between them, responsible for internal security, guarding the borders, and securing vital installations like airports.
Also, Rs 42,277 crore has been allocated to the Union Territory of Jammu and Kashmir that, for now, under the direct control of the centre. Rs 5,985 crore has been given to Andaman and Nicobar, Rs 5,862 crore to Chandigarh, and Rs 5,958 crore to Ladakh, among provisions for other UTs.
Education
The government has set aside Rs 1.26 lakh crore for education, which Ms Sitharaman said is among the core focus areas for the 2024 Union Budget and those to follow.
These will include financial support for loans for higher education – up to Rs 10 lakh – to help youth who may not otherwise be eligible for benefits under other government schemes and policies.
In addition, the government has also set aside Rs 1.48 lakh crore for schooling, employment, and skilling, which are part of the aforementioned core focus areas.
IT And Telecom
Rs 1.16 lakh crore has been budgeted for the Department of Telecommunications. This is a 24 per cent increase from FY24 and almost as large an increase from the amount in the interim budget.
Ahead of the budget presentation today telecom service providers had called for measures to help carry forward and offset losses for as much as 16 assessment years. For now this is capped at eight.
The Ministry of Electronics and Information Technology will get around Rs 22,000 crore.
Health
The government has allocated Rs 89,287 crore for the country’s healthcare system.
It is only marginally higher than the Rs 88,956 crore in FY24.
This year, the government has also allocated Rs 2,143 crore for the pharmaceutical industry.
Among the big announcements in this space was that three more cancer medications have been exempted from customs duties. In March, after the interim budget, the government had exempted Merck’s Pembrolizumab (Keytruda), used for cervical cancer, from BCD, or basics custom duty.
Normally medicines attract five to 10 per cent BCD.
Energy
Energy budget allocation has been set at Rs 68,679 crore.
This includes Rs 19,100 crore for the Ministry of New and Renewable Energy, up from Rs 12,850 in the interim budget. It also includes Rs 8,500 crore allocated for solar power (grid) – a massive jump of 79 per cent from revised estimates of last year’s budget. Solar energy was a major beneficiary in this budget, with allocation up from Rs 6,042 crore last year to an impressive Rs 16,400 crore today.
In line with this, Ms Sitharaman said she would expand list of exempted goods for manufacture of solar cells and panels. This will give one crore households 300 units of free electricity per month.
The budgetary allocation for energy generation comes amid a sustained increase in power demand, particularly when parts of the country face heat waves, as northern India does this year.
READ | India’s Electricity Demand May Surge By 8% This Year: Report
A report by the International Energy Agency last week said India’s electricity demand may surge by as much as eight per cent this year.
Nirmala Sitharaman’s Seventh Budget
Ms Sitharaman this morning presented her seventh Union Budget, and the first of Prime Minister Narendra Modi’s third term. Among the major highlights were tweaks to the new tax regime slabs, including raising standard deduction from Rs 50,000 to Rs 75,000.
READ | New Tax Regime Slabs Changed, Standard Deduction Up To 75,000
As a result, the Finance Minister told Parliament, salaried employees can save as much as Rs 17,500 in the new regime.
Budget 2024 also had good news for first-time professionals. Ms Sitharaman said the government will give one month’s salary to those joining their first job. This will be provided as a Provident Fund contribution subject to a maximum of Rs 15,000. This, she said, will benefit 210 lakh youngsters.
READ | Budget 2024: Big Push For Jobs, Gains For New Regime Taxpayers, Allies
Budget 2024 also proposed raising the limit of exemption of capital gains on some financial assets to Rs 1.25 lakh per year. The Finance Minister also said the angel tax will be cut for all investor classes.
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