Finance And Economics Club

IIT Guwahati

UNION
BUDGET
ANALYSIS
Year 2024 -25

Finance & Economics Club

[email protected]
Content
Introduction

Budget Highlights

Policy Highlights

Fiscal deficit

Rupee Highlights

Market and Interim Budget

FEC Capital, IIT Guwahati 1

 Introduction

T
he Union Budget 2024 encompassed a concentration on social justice with
a distinct emphasis on "garib" (poor), "mahilayen" (women), "yuva" (youth),
and "annadata" (farmers). FM Sitharaman underscored that the needs,
aspirations, and welfare of these four segments are the government's "highest
priority," highlighting that the beneficiaries span across different strata and
geographical regions.

The projected gross and net borrowings for the fiscal year 2024-25 are
anticipated to be lower than the current financial year, 2023-24. This is expected
to free up more credit for the private sector, which is now viewed as making
substantial investments. Unlike the 2019-20 interim Budget, no adjustments
were announced in direct or indirect tax rates. Revised Estimates are being
presented, revealing that the Fiscal Deficit stands at 5.8%, slightly below the
target of 5.9%. The Fiscal Deficit target for the next financial year, FY25, is set at
5.1%.

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Budget Highlights

INFRASTRUCTURE AND INVESTMENT

PM Gati Shakti's three railway corridor programs aim to boost logistics efficiency and
reduce costs, evident in the rise of electrified rail routes from 15,000 Km (FY15) to
22,224 Km (FY22). Concurrently, there's a focus on foreign investment through
bilateral treaties, leveraging national highways' growth (97,991 Km to 144,634 Km FY15-
FY22) and port cargo traffic increase (581.3 million tonnes to 720 million tonnes FY15-
FY22).
In aviation, UDAN scheme-driven airport expansion (16 to 25 FY15-FY22) enhances air
connectivity, catering to rising demand and stimulating economic activity. Urban
transformation via Metro rail and NaMo Bharat aligns with sustainable transportation,
evident in the growing electrified rail routes and airport numbers.

National Highways Authority of India (NHAI) sees an increment from Rs. 162,207 Cr
to Rs. 168,464 Cr.
Road Works witness an increase from Rs. 107,713 Cr to Rs. 109,093 Cr.
Road Safety Works for bridges experience growth from Rs. 7,400 Cr to Rs. 9,506 Cr.
New Lines allocation rises from Rs. 31,850 Cr to Rs. 36,091 Cr.
Investments in PSU/JV/SPV decrease from Rs. 34,354 Cr to Rs. 31,107 Cr.
Track renewals observe a decrement from Rs. 17,297 Cr to Rs. 17,150 Cr.
Metro Projects receive a boost, increasing from Rs. 19,518 Cr to Rs. 21,336 Cr.
Works under Border Roads Development Board see a significant rise from Rs.
5,000 Cr to Rs. 6,500 Cr.
Electrification Projects witness a decrease from Rs. 8,070 Cr to Rs. 6,500 Cr.
Traffic Facilities, including Yard Remodelling and Others, show a notable increase
from Rs. 6,715 Cr to Rs. 8,650 Cr.
Doubling efforts experience a slight reduction from Rs. 30,749 Cr to Rs. 30,000 Cr.
New Lines observe an increment from Rs. 31,850 Cr to Rs. 36,091 Cr.

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Budget Highlights
INCLUSIVE DEVELOPMENT
Promoting Inclusive Development in Aspirational Districts:
The percentage of women registering for Anti-Natal Care within the first
trimester increased from 68% in 2018 to 89% in 2024.
Enrollments under the Pradhan Mantri Jeevan Jyoti Yojana (PMJJBY) per
lakh population rose from 1737 in 2018 to 13195 in 2023.

HOUSING:
In the housing sector, the Pradhan Mantri Awas Yojana (Grameen) is on
the verge of achieving its target of 3 crore houses, with an additional 2 crore
houses targeted for the next five years. The budget allocation for the year
2023-24 was Rs. 79,590 cr, and for the year 2024-25, it is set at Rs. 80,671 cr.
To further support the housing needs of the middle class, a new scheme
will be launched to encourage them to purchase or build their own houses.

TOURISM:
Promoting the Development of Iconic Tourist Centers:
States will be motivated to embark on the development of iconic tourist
centers, fostering business attraction and creating opportunities for local
entrepreneurship.
Initiatives will be implemented for the enhancement of port connectivity,
tourism infrastructure, and amenities in islands, including Lakshadweep.
The diversity of India was showcased to a global audience through G20
meetings held in 60 different locations.
To incentivize development, long-term interest-free loans will be extended
to States.

HEALTH:
Promotion of Cervical Cancer Vaccination for girls aged 9-14 years.
Acceleration of Saksham Anganwadi and Poshan 2.0 programs to
enhance nutrition delivery and improve early childhood care and
development.
Implementation of the U-WIN platform to streamline immunization efforts
as part of Mission Indradhanush.
Expansion of health coverage under the Ayushman Bharat scheme to
encompass all ASHA (Accredited Social Health Activist), Anganwadi
workers, and he

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Fiscal Deficit
The fiscal deficit essentially reflects the extent to which the government
borrows funds from the market, aiming to bridge the disparity between its
expenditures and revenue. It is a crucial metric since increased government
borrowing leaves a reduced pool of funds for private sector borrowing,
subsequently causing elevated interest rates and a consequential
dampening of economic activity.
Anticipating the Budget, analysts expected the government to reduce the
fiscal deficit to 5.9% of the GDP. The Finance Minister surpassed these
expectations by announcing a reduction to the 5.8% level. Additionally, the
FM outlined ambitious targets for fiscal years 2025 (at 5.1% of GDP) and
2026 (at 4.5% of GDP).

While this development is positive, it's essential to consider the shortfall in

achieving capital expenditure targets. The government garnered acclaim
last year for elevating the capital expenditure target to Rs 10 lakh crore.
However, the Revised Estimates data indicates that the target was not fully
met, reaching only Rs 9.5 lakh crore. Although the deviation is relatively
small, not meeting the intended capex goal could have undoubtedly
assisted the government in attaining its overall targets.

The government's primary financial resources are sourced from borrowing,

closely followed by income tax revenues, the second-largest contributor or
primary income generator. As per Budget documents, it is anticipated that
income tax revenues will represent 19% of all government resources in FY25.
Corporate tax is projected to contribute 17%, GST 18%, and the largest share
will come from borrowings at 28%. It is imperative to critically assess the fact
that the ambitious targets for reducing the fiscal deficit might be achieved
at the expense of taxpayers. Despite the absence of explicit support for this
assertion in the form of increased tax rates for both income and corporate
sectors, there is a need to maintain optimism regarding the sustainability of
this development and its potential positive impact on the Indian economy in
the years to come.

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 Table 1:Budget at a glance :2024-25
(Rs. Crore)
Budget Revised Budget
Actual
Estimates Estimates Estimates % change
(2022-23)
(2023-24) (2023-24) (2024-25)
Revenue
3,146,868.00 3,132,148.00 3,219,049.00 3,269,075.00 1.6%
Expenditure

Capital Expenditure 1,046,289.00 1,370,949.00 1,271,436.00 1,496,693.00 17.8%

Total Expenditure 4,193,157.00 4,503,097.00 4,490,485.00 4,765,768.00 6.2%

On revenue account 3,453,132.00 3,502,136.00 3,540,239.00 3,654,657.00 3.3%

Interest payments 928,517.00 1,079,971.00 1,055,427.00 1,190,440.00 12.8%

Grants in aid for
creation of capital 306,264.00 369,988.00 321,190.00 385,582.00 20.1%
account
On capital account 740,025.00 1,000,961.00 950,246.00 1,111,111.00 17%

2,383,206.0
Revenue Receipts 2,632,281.00 2,699,713.00 3,001,275.00 11.2%
0

Capital Receipts 1,809,951.00 1,870,816.00 1,790,773.00 1,764,494.00 -1.5%

Recoveries of Loans 26,161.00 23,000.00 26,000.00 29,000.00 11.6%

Other receipts
(including 46,035.00 61,000.00 30,000.00 50,000.00 66.7%
disinvestments)
Borrowings and
1,737,755.00 1,786,816.00 1,734,773.00 1,685,494.00 -2.9%
other Liabilities
Total Receipts
2,455,402.0
(excluding 2,716,281.00 2,755,713.00 3,080,275.00 11.8%
0
borrowings)
1,069,926.0
Revenue Deficit 869,855.00 840,526.00 653,382.00 -22.3%
0
% of GDP 3.96% 2.9% 2.81% 2% -28.9%

Fiscal Deficit 1,737,755.00 1,786,816.00 1,734,772.00 1,685,493.00 -2.9%

% of GDP 5.8% 5.96% 5.79% 5.15% -11.1%

Primary Deficit 809,238.00 706,845.00 679,345.00 495,053.00 -27.2%

% of GDP 2.7% 2.36% 2.27% 1.52% -33.1%

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 Table 2:Break up of central government
receipts in 2024-25 (Rs. crore)
Budget Revised Budget
Actual
Estimates Estimates Estimates %change
(2022-23)
(2023-24) (2023-24) (2024-25)

Gross Tax Revenue 3054192 3360858 3437211 3830796 11.5

Corporation Tax 825834 922675 922675 1042830 13.1

Taxes on Income 833260 900575 1022325 1156000 13.1

Goods and Services Tax 849133 956600 956600 1067650 11.7

Customs 213372 23310 218680 231310 5.8

Union Excise Duties 319000 339000 303600 318780 5

Service Tax 431 500 500 100 -80

Centre's Net Tax

2097786 2330631 2323918 2601574 12
Revenue(A)

Devolution to States 948407 1021448 1097342 1219783 11.2

Non Tax Revenue(B) 285421 301650 375795 399701 6.4

Interest Receipts 27852 24820 31778 33107 4.2

Dividend 99913 91000 154407 150000 -2.9

Other Non-Tax Revenue 153577 181382 185642 212640 14.6

Capital Receipts (without

1,809,951.00 1,870,816.00 1,790,773.00 1,764,494.00 -1.5
borrowings) (C)
Receipts (without 3,080,275.0
2,455,402.00 2,716,281.00 2,755,713.00 11.8
borrowings) (A+B+C) 0

Borrowings 1,737,755.00 1,786,816.00 1,734,773.00 1,685,494.00 -2.9

Total Receipts (including 4,490,486.0 4,765,769.0

4,193,157.00 4,503,097.00 6.2
borrowings) 0 0

FY18
FY19
FY20
FY21
FY22
FY23
FY24(BE)
FY25(BE)
0.0 2.0 4.0 6.0 8.0 10.0 12.0

Capital Expenditure (in Lk Cr.)

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Policy Highlights
The environmental commitment to achieve 'Net Zero' by 2070 reflects a
steadfast dedication to sustainable practices. This pledge encompasses
support for renewable energy initiatives, including viability gap funding for
wind energy and proactive efforts in coal gasification and liquefaction. The
integration of green fuels is facilitated through a phased mandatory
blending of CNG, PNG, and compressed biogas, signaling a deliberate push
towards eco-friendly fuel adoption. Additionally, financial aid is channeled
into agricultural sustainability, specifically targeting biomass aggregation
machinery and rooftop solarization for one crore households.

In the domain of electric transportation and LPG milestones, the

commitment is evident through the adoption of e-buses, active support for
the e-vehicle ecosystem, and the provision of over 10 crore LPG
connections under the Pradhan Mantri Ujjwala Yojana (PMUY).
Simultaneously, energy-efficient solutions are implemented at scale,
encompassing the widespread distribution of LED bulbs, tube lights, fans,
and the installation of 1.3 crore LED street lights under the Street Lighting
National Programme (SNLP).

The government's commitment extends to a substantial boost in research

and development, with Rs. 1,200 Cr. allocated to R&D projects, including a
significant portion for projects under the Bhabha Atomic Research Centre
(BARC). Moreover, technology promotion efforts receive attention with Rs.
750 Cr. directed towards electronics and IT manufacturing and an
additional Rs. 1,148 Cr. dedicated to IT/electronics/CCBT R&D. Support for
electric vehicles is underscored by a financial injection of Rs. 2,671 Cr. for
the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles
in India (FAME-India) initiative, thereby fostering growth in the electric
vehicle ecosystem. The government's holistic approach is further
exemplified by substantial funding for environmental initiatives, economic
support for MSMEs, and strategic investments in the public sector, all
contributing to the nation's sustainable development goals.

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 Policy Highlights
The 'ANNADATA - Welfare of Farmers' initiative in the 2024 budget embodies a
holistic strategy to bolster the agricultural sector. Financial support is channeled
directly to 11.8 crore farmers through PM-KISAN, complemented by expanded
crop insurance coverage for 4 crore farmers under PM Fasal Bima Yojana. The
integration of 1,361 mandis into eNAM is a pivotal move, facilitating a robust
trading volume of ₹3 lakh crore. Subsidy rationalization is evident with the
reduction of fertilizer subsidy to ₹1,64,000 Cr., while the overall agriculture and
allied subsidies amount to ₹1,46,819 Cr. Allocations for Urea and Nutrient-Based
Subsidies stand at ₹1,19,000 Cr. and ₹45,000 Cr. respectively.

The second facet of this agricultural initiative focuses on employment and

irrigation. There is a noteworthy 43.3% increase, totaling ₹86,000 Cr., for the
Mahatma Gandhi National Rural Employment Guarantee Program.
Additionally, allocations for the Pradhan Mantri Krishi Sinchai Yojna witness an
increment to ₹11,391 Cr. and ₹7,553 Cr. These measures underscore a commitment
to enhancing employment opportunities and improving irrigation infrastructure.
Simultaneously, there are revolutionary steps in agricultural practices, with the
Blue Revolution receiving ₹2,352 Cr. and the Crop Insurance Scheme fortified
with ₹14,600 Cr. The PM-Kisan allocation is increased to ₹60,000 Cr.,
demonstrating a comprehensive approach to modernize and fortify the
agricultural landscape.

The final aspect encompasses support for farmer organizations, food security,
advancements in agricultural science, and welfare schemes. Despite a slight
decrease to ₹582 Cr., funds are allocated for the formation and promotion of
10,000 Farmer Producer Organizations (FPOs). Ensuring food security, ₹1,738 Cr. is
earmarked for Pradhan Mantri Annadata Aay Sanrakshan Yojna (PM-AASHA), and
₹600 Cr. is dedicated to the Agriculture Infrastructure Fund (AIF). Advancements
in agricultural science receive a boost with ₹930 Cr. allocated for Crop Science for
Food and Nutritional Security. Welfare schemes, such as ₹2,05,250 Cr. for
Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) and ₹1,996 Cr. for Kisan
Urja Suraksha evam Utthaan Mahabhiyan (KUSUM), further underline the
government's commitment to comprehensive and sustainable agricultural
development.

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 Table 3:Scheme wise allocation in 2024-
25(Rs. Crore)
Budget
Actuals Budgeted Revised Budgeted
Schemes Estimates %change
2022-2023 2022-2023 2022-2023 2023-2024
2024-2025

Pradhan Mantri Awas

90,200 48,000 77,130 79,590 80,671 1.4
Yojana

Jal Jeevan Mission 63,126 60,000 55,000 70,000 70,163 0.3

PM-KISAN 66,825 68,000 60,000 60,000 60,000 0

MGNREGS 98,468 73,000 89,400 60,000 86,000 43.4

Samagra Shiksha
32,515 32,876 32,900 37,453 37,500 0.2
Abhiyan

National Health Mission 32,958 37,160 33,708 36,785 38,183 3.9

Modified Interest
- 19,500 22,000 23,000 22600 -1.8
Subvention Scheme*

Saksham Anganwadi and

18,382 20,263 20,263 20,554 21,200 3.2
POSHAN 2.0

Pradhan Mantri Gram

13,992 19,000 19,000 19,000 19,000 0
Sadak Yojana

AMRUT and Smart Cities

13,868 14,100 15,300 16,000 10,400 -35
Mission

National Livelihood
10,177 14,236 13,886 14,129 15,047 6.5
Mission-Ajeevika

Guarantee Emergency
Credit Line to MSME 7,445 15,000 10,500 14,100 10,163 -28
borrowers

Pradhan Mantri Fasal

13,549 15,500 12,376 13,625 14600 7.2
Bima Yojana

Swachh Bharat Mission 5,050 9,492 7,000 12,192 9,994 -18.1

Reform Linked
814 7,566 6,000 12,072 14,500 20.2
Distribution Scheme

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Table 4:Allocations for women, children,
SCs, STs and NER (Rs crore)
Budget Revised Budget
Actual
Estimates Estimates Estimates %change
(2023-24)
(2023-24) (2023-24) (2024-25)

Welfare of Women 19,680.00 20,554.00 20,554.00 23,836.00 16.08%

Welfare of
1,22,256 1,34,928 1,34,928 1,47,258 9.14%
Children

Welfare of Castes 1,25,261 1,37,059 1,37,059 1,42,106 3.67%

Welfare of Tribes 80,382.00 87,140.00 87,140.00 94,478.00 8.67%

North Eastern
57,520.00 67,700.00 67,700.00 71,726.00 5.90%
Region(NER)

100 14000

12000
80
10000

60
8000

6000
40

4000
20
2000

0 0
2018 2023 2018 2023
No. of enrolment under
% of women registered
PMJJBY per lk population
for Anti-Natal Care

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 Income Tax
Borrowing and Other Liab…

Rupee Highlights
Non Tax Receipts
Non-Debt Capital Receipts
Customs
GST andRUPEE COMES
Other Taxes FROM
Corporation Tax
Union Excise Duties
Income Tax
Corporation Tax 19.2%
17.2%

GST and Other Taxes

18.2%
Borrowing and Other Liabilities
Non Tax Receipts 28.3%
7.1%

RUPEE GOES TO
Interests Payment
Centrally Sponsored Schem…
Subsidies Defence
Central Sector Schemes
Finance Commission and ot…
States' share of Taxes and D…
Open Expenditure
Pensions
Open Expenditure Interests Payment
9.1% 20.2%

States' share of Taxes and Duties

20.2% Centrally Sponsored Schemes
8.1%

Subsidies
6.1%

Central Sector Schemes 12

FEC Capital, IIT Guwahati 16.2%
 Market and Interim Budget
With held of upcoming elections government expressed minimal surprises and
avoided any significant shock in the budget 2024-2025. Government
maintained discipline on the current account deficit and fiscal deficit that
would promote spending power of the people for the investments. This budget
represents a balanced and positive approach, focusing on stimulating growth
and financial stability.

Budget highlighted major policies focusing sectors like agriculture, tourism,

infrastructure, roadways, railways, defense, power and housing. Also the budget
has promised to focus on EV manufacturing and develop EV charging
infrastructure in the country that will offer the much-needed push toward
green mobility. EV charging methods and solarization projects will promote the
adoption of EV Vehicles all across the country. Upgrading railway bogies to
Vande Bharat standards will enhance safety, convenience, and passenger
experience, further increasing our infrastructure and manufacturing activities.
Budget 2024 also raises hopes for real estate sector, the decision to spend more
on infrastructure development is great. However, we really need to simplify the
legal rules. If we make it easier, there's a good chance that wealthy individuals
will start investing in the sector. This could lead to successful completion of
residential and commercial projects.

Another interesting scheme related to bio-manufacturing and bio-foundry.

There's significant potential for bio-plastics and bio-polymers in India, which
can help us progress in this growing global industry. States will be encouraged
to comprehensively develop iconic tourist centers, branding and marketing
them on a global scale. This initiative aims to boost investments in railways,
roadways, and hotels.
Overall in conclusion budget 2024 can create a positive effects on industries like
steel, cement, capital goods etc.

FEC Capital, IIT Guwahati 13

Sources
Union Budget Website.
Address by the Finance Minister.

Curated By-
Aarohan Gupta
Ananya Singh
Anirban Ghosh
Aryan Shivapuram
Dhruv Bhasin
Ishika Bohra
Neel Junnarkar
Pranav Jori
Rahul Mareja
Shreyanshi Sharma
Utkarsh Utpal
Vishakha Chaudhary

FEC Capital, IIT Guwahati