GS PAPER: III

Interim Union Budget 2024-25

Why in the news?

• The Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Interim Union Budget 2024-25 in Parliament with the ‘mantra’ of ‘Sabka Saath, Sabka Vikas, and Sabka Vishwas’ and the whole of nation approach of “Sabka Prayas”.

The key highlights of the Budget

Social Justice

• Prime Minister to focus on upliftment of four major castes, that is, ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and  ‘Annadata’(Farmer).

‘Garib Kalyan, Desh ka Kalyan’

• Government assisted 25 crore people out of multi-dimensional poverty in last 10 years.
• DBT of Rs. 34 lakh crore using PM-Jan Dhan accounts led to savings of Rs. 2.7 lakh crore for the Government.
• PM-SVANidhi provided credit assistance to 78 lakh street vendors. 2.3 lakh have received credit for the third time.
• PM-JANMAN Yojana to aid the development of particularly vulnerable tribal groups (PVTG).
• PM-Vishwakarma Yojana provides end-to-end support to artisans and crafts people engaged in 18 trades.

Welfare of ‘Annadata’

• PM-KISAN SAMMAN Yojana provided financial assistance to 11.8 crore farmers. 
• Under PM Fasal BimaYojana, crop insurance is given to 4 crore farmers
• Electronic National Agriculture Market (e-NAM) integrated 1361 mandis, providing services to 1.8 crore farmers with trading volume of Rs. 3 lakh crore.

Momentum for Nari Shakti

• 30 crore Mudra Yojana loans given to women entrepreneurs.
• Female enrolment in higher education gone up by 28%.
• In STEM courses, girls and women constitute 43% of enrolment, one of the highest in the world.
• Over 70% houses under PM Awas Yojana given to women from rural areas.

PM Awas Yojana (Grameen)

• Despite COVID challenges, the target of three crore houses under PM Awas Yojana (Grameen) will be achieved soon.
• Two crore more houses to be taken up in the next five years.

Rooftop solarization and muft bijli

• 1 crore households to obtain 300 units free electricity every month through rooftop solarization.
• Each household is expected to save Rs.15000 to Rs.18000 annually.

Ayushman Bharat

• Healthcare cover under Ayushman Bharat scheme to be extended to all ASHA workers, Anganwadi Workers and Helpers.

Agriculture and food processing

• Pradhan Mantri Kisan Sampada Yojana has benefitted 38 lakh farmers and generated 10 lakh employment.
• Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana has assisted 2.4 lakh SHGs and 60000 individuals with credit linkages.

Research and Innovation for catalyzing growth, employment and development

• A corpus of Rs.1 lakh crore to be established with fifty-year interest free loan to provide long-term financing or refinancing with long tenors and low or nil interest rates.
• A new scheme to be launched for strengthening deep-tech technologies for defence purposes and expediting ‘atmanirbharta’.

Infrastructure

• Capital expenditure outlay for Infrastructure development and employment generation to be increased by 11.1 per cent to Rs.11,11,111 crore, that will be 3.4 per cent of the GDP.

Railways

• 3 major economic railway corridor programmes identified under the PM Gati Shakti to be implemented to improve logistics efficiency and reduce cost
• Energy, mineral and cement corridors
• Port connectivity corridors
• High traffic density corridors
• Forty thousand normal rail bogies to be converted to Vande Bharat standards.

Aviation Sector

• Number of airports in the country doubled to 149.
• Five hundred and seventeen new routes are carrying 1.3 crore passengers.
• Indian carriers have placed orders for over 1000 new aircrafts.

Green Energy

• Coal gasification and liquefaction capacity of 100 MT to be set up by 2030.
• Phased mandatory blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes to be mandated.

Tourism sector

• States to be encouraged to take up comprehensive development of iconic tourist centres including their branding and marketing at global scale.
• Framework for rating of the tourist centres based on quality of facilities and services to be established.
• Long-term interest free loans to be provided to States for financing such development on matching basis.

Investments

• FDI inflow during 2014-23 of USD 596 billion was twice of the inflow during 2005-14.

Reforms in the States for ‘Viksit Bharat’

• A provision of Rs.75,000 crore rupees as fifty-year interest free loan is proposed to support milestone-linked reforms by the State Governments.

Revised Estimates (RE) 2023-24

• RE of the total receipts other than borrowings is Rs.27.56 lakh crore, of which the tax receipts are Rs.23.24 lakh crore.
• RE of the total expenditure is Rs.44.90 lakh crore.
• Revenue receipts at Rs.30.03 lakh crore are expected to be higher than the Budget Estimate, reflecting strong growth momentum and formalization in the economy.
• RE of the fiscal deficit is 5.8 per cent of GDP for 2023-24.

Budget Estimates 2024-25

• Total receipts other than borrowings and the total expenditure are estimated at Rs.30.80 and Rs.47.66 lakh crore respectively.
• Tax receipts are estimated at Rs.26.02 lakh crore.   
• Scheme of fifty-year interest free loan for capital expenditure to states to be continued this year with total outlay of Rs.1.3 lakh crore.
• Fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP
• Gross and net market borrowings through dated securities during 2024-25 are estimated at Rs.14.13 and Rs.11.75 lakh crore respectively.

Direct taxes

• FM proposes to retain same tax rates for direct taxes
• Direct tax collection tripled, return filers increased to 2.4 times, in the last 10 years
• Government to improve tax payer services
• Outstanding direct tax demands upto Rs 25000 pertaining to the period upto FY 2009-10 withdrawn
• Outstanding direct tax demands upto Rs 10000 for financial years 2010-11 to 2014-15 withdrawn
• This will benefit one crore tax payers
• Tax benefits to Start-Ups, investments made by Sovereign wealth funds or pension funds extended to 31.03.2025
• Tax exemption on certain income of IFSC units extended by a year to 31.03.2025 from 31.03.2024

Indirect taxes

• FM proposes to retain same tax rates for indirect taxes and import duties
• GST unified the highly fragmented indirect tax regime in India
• Average monthly gross GST collection doubled to Rs 1.66 lakh crore this year
• GST tax base has doubled
• State  SGST revenue buoyancy (including compensation released to states) increased to 1.22  in post-GST period(2017-18 to 2022-23) from 0.72 in the pre-GST period (2012-13 to 2015-16)
• 94% of industry leaders view transition to GST as largely positive
• GST led to supply chain optimization
• GST reduced the compliance burden on trade and industry
• Lower logistics cost and taxes  helped reduce prices of goods and services, benefiting the consumers

Tax rationalization efforts over the years

• No tax liability for income upto Rs 7 lakh, up from Rs 2.2 lakh in  FY 2013-14
• Presumptive taxation threshold for retail businesses increased to Rs 3 crore from Rs 2 crore
• Presumptive taxation threshold for professionals increased to Rs 75 lakh from Rs 50 lakh
• Corporate income tax decreased to 22% from 30% for existing domestic companies
• Corporate income tax rate at 15% for new manufacturing companies

Achievements in tax-payer services

• Average processing time of tax returns has reduced to 10 days from 93 days in 2013-14
• Faceless Assessment and Appeal introduced for greater efficiency
• Updated income tax returns, new form 26AS and prefilled tax returns for simplified return filing
• Reforms in customs leading to reduced Import release time
• Reduction by 47% to 71 hours at Inland Container Depots
• Reduction by 28% to 44 hours at  Air Cargo complexes
• Reduction by 27% to 85 hours at Sea Ports

 

GS PAPER – III

ASHA and anganwadi workers get health cover

Why in the news?

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

About the health sector initiative

• 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.
• 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.

Skill training

• The Minister added that, as part of the Skill India Mission, youth is 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.
• 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.

 

GS PAPER – III

Fertilizer subsidy set to decline, food subsidy sees increase

Why in news?

• The Centre has decreased fertiliser subsidies, apparently hoping that the improving situation in Ukraine and increased domestic production will help in managing the situation.
• The Fertilisers and Chemicals Ministry has been claiming that the increase in domestic production of essential fertilisers such as urea will result in decreasing fertiliser subsidies.

Budget allocation

• Allocation for the Fertilisers Department in this Budget is Rs.1,64,150.81 crore. It was Rs.1,75,148.48 crore in the last Budget. In the Revised Estimates of the last financial year, it was Rs.1,88,947.29 crore.
• The amount actually used in 2022-23 was Rs.2, 51,369.18 crore, with payments for indigenous and imported urea estimated to have accounted for the bulk of the expenditure.
• Union Finance Minister Nirmala Sitharaman announced in the Budget that after the successful adoption of Nano Urea, application of Nano Di Ammonium Phosphate (Nano DAP) on various crops will be expanded to all agro-climatic zones. She said the pandemic had led to a crisis of food, fertiliser, fuel and finances for the world, while India successfully navigated its way. 
• The expansion of the application of Nano DAP on various crops, announced in the Budget will encourage sustainable farming. It will also help in making India Aatmanirbhar in fertilisers

Food subsidy sees increase

• Food subsidy has seen an increase in the allocation compared to the last year. The total food subsidy includes Rs. 2,05,250 crore for the Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY) and Rs.1 lakh crore for the Sugar Subsidy payable under Public Distribution System. In the last Budget, the amount was 1,97,350 crore, while in 2022-23, the actual expenditure was Rs.2,72,802.38 crore.
• The worries about food have been eliminated through free ration for 80 crore people. “Minimum support prices for the produce of ‘Annadata’ [food providers or farmers] are periodically increased appropriately.
• These and the provision of basic necessities have enhanced real income in the rural areas. Their economic needs could be addressed, thus spurring growth and generating jobs.

 

GS PAPER – III

Net zero gain for job guarantee scheme

Why in news?

• With allocation of Rs.86,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the budget for the scheme for the financial year 2024-25 has been hiked by Rs.26,000 crore in comparison to the 2023-24 Budget estimates, though it is the same as the revised estimates for the ongoing financial year (2023-24). So, the net gain for the rural employment scheme could be zero or even negative. 

About the job guarantee scheme

• As per the statistics available on the Union Rural Development Ministry website, the total expenditure on the programme so far has been Rs.88,309.72 crore. According to some estimates, as on February 1, the Centre owes Rs. 16,000 crore in wages to the State governments.
• The government has argued that MGNREGS is a dynamic scheme and the dues are cyclically paid. But for the last two years, the Centre has halted the programme in West Bengal, claiming corruption in implementation of the scheme. The Centre owes nearly Rs.7,000 crore to the State.
• The 2024 Budget, though, breaks the continued trend of slashing the budget for the programme. In the 2023 Budget, only Rs.60,000 crore was allocated which was 18% lower than the Rs.73,000 crore Budget estimates and 33% lower than the Rs.89,000 crore revised estimates for financial year 2023-24 for the scheme.

Trend in allocations to the MGNREGA Programme

• Simple calculation points out that considering 5.6 crore households are registered under the programme, this sum can provide for 25 to 30 days at most of work in a year.
• The allocation furthers the trend of spending 15 to 20% of the budget clearing the past dues, in the present case this includes Rs. 7,000 crore owed to the West Bengal government. “To meet the employment needs of registered households under MGNREGS, a crucial Rs.3 lakh crore is essential.
• However, the allocated budget falls significantly short at a mere Rs. 86,000 crore. Considering the outstanding dues in West Bengal that need clearing and the additional work requirements for the workers in the State this year, coupled with the historical trend of 15 to 20% of the budget being spent on clearing past dues, the allocation seems increasingly inadequate.
• This shortfall raises serious concerns as it not only jeopardises the guaranteed right to work under MGNREGS but also constitutes a gross violation of this fundamental entitlement.

 

GS PAPER – III

Committee to study ‘fast population growth’ and demographic changes

Why in news?

• The government will establish a committee to understand challenges created by fast population growth, Union finance minister Nirmala Sitharaman said during the course of her interim budget speech.
• The government will form a high-powered committee for an extensive consideration of the challenges arising from fast population growth and demographic changesThe committee will be tasked with providing recommendations to overcome these challenges.

What will committee do?

• This committee will have the mandate to have an extensive consideration of those challenges and come out with a specific set of recommendations
• Though it does not specifically comment on a question about whether the committee’s mandate would resemble a population control bill.

India’s Population:

• As Per the United Nation’s estimate, India surpassed China to become the world’s most populous country in April 2023.
• While China’s population size peaked in 2022, it has fallen subsequently and is expected to fall below 1 billion by the end of the century. 
• Meanwhile, India’s population will continue to grow over the coming decades, with individuals under 35 forming a large part of its population.
• India has the largest youth population in the world; around 66% of the total population (more than 808 million) is below the age of 35,” according to the International Labour Organisation. 
• The organisation’s figures also indicate that India’s workforce is expected to grow by 8 million persons per annum over the next decade.

Efforts related to the bill:

• In 2019, BJP MP Sanjeev Balyan, who later became Union Minister, said the government was working on formulating the population control bill. Tabling a private member bill in Lok Sabha, he said that the root cause of a majority of the problems in India is its “uncontrolled growth of population.”
• In 2022, another BJP MP, Rakesh Sinha, introduced his Population Regulation Bill in the Rajya Sabha. He later withdrew the bill after Union Health Minister Mansukh Mandaviya’s intervention.
• Sinha had sought to enforce a two-child rule with penal provisions for violations.
• The BJP MP, while withdrawing his bill, said that the government efforts are being undertaken in “an constitutional manner and we do not want to repeat the emergency,” referring to the compulsory sterilisation programme that Sanjay Gandhi launched to limit population growth in 1976.

 

GS PAPER – III

Rooftop solarization

Why in news?

• Finance Minister Nirmala Sitharaman announced important measures in the Interim Budget 2024-25, paving the path for the nation to becoming a greener economy.
• The highlight of the green initiatives was rooftop solarisation, aiming to empower one crore households to receive up to 300 units of free electricity every month.

What will rooftop solarization do?

• Through rooftop solarisation, one crore households will be enabled to obtain up to 300 units of free electricity every month.
• This scheme follows the resolve of Prime Minister Narendra Modi on the historic day of consecration of Ram Mandir in Ayodhya,
• The focus on rooftop solarisation is seen as an important step towards involving Indian citizens actively in the country’s energy transition.
• According to analysis by the Council on Energy, Environment and Water (CEEW), this initiative could support the installation of 20-25 GW of rooftop solar capacity, benefitting one crore households.
• The CEEW estimates potential savings of around Rs 2 lakh crore for electricity distribution companies over the next 25 years.

What is PM suryodaya Yojana:

• Prime Minister Narendra Modi had announced the scheme to install solar panels on one crore houses across the country as part of the government’s PradhanmantriSuryodaya Yojana.
• This was the first decision the Prime Minister took after completing the grand Ram Mandir Pran Pratishtha ceremony (consecration ceremony) in Ayodhya.
• State-run Rural Electrification Corporation Limited has been designated as the nodal agency for the Pradhan Mantri Suryodaya Yojana, aiming to install rooftop solar systems in 10 million households.
• Rooftop solar involves the installation of solar photovoltaic (PV) panels on the roof of a building or home.
• Pradhan Mantri Suryodaya Yojana, a new scheme aimed at providing electricity to low and middle-income individuals through solar rooftop installations.