Latest News: India's Index of Industrial Production (IIP) records a growth of 5.9 per cent in May'24 * All is not well with the Indian political system and it is functioning under great strain, says Vice President Jagdeep Dhankhar * Budget Session of Parliament to be held from 22nd July to 12th August

GDP projected to grow at 7.3 percent in FY 2023-24

The Finance and Corporate Affairs Minister Nirmala Sitharaman, while presenting the Interim Union Budget for 2024-2025 in Parliament, announced that the capital expenditure outlay for the next year is being increased by 11.1 percent to ₹11,11,111 crore, which would be  3.4 percent of the GDP.

She said this is in the wake of building on the massive tripling of the capital expenditure outlay in the past four years resulting in a huge multiplier impact on economic growth and employment creation.

As per the First Advance Estimates of National Income of FY 2023-24, presented along with the Finance Minister’s speech, India’s Real GDP is projected to grow at 7.3 percent. This is also in line with the upward revision in growth projections for FY2023-24 by the RBI in its December 2023 Monetary Policy Committee meeting, from 6.5 percent to seven percent, prompted by strong growth in Q2 of FY2023-24.

Indian economy has demonstrated resilience and maintained healthy macro-economic fundamentals, despite global economic challenges. The International Monetary Fund, in its World Economic Outlook, October 2023, has revised its growth projection for India for FY2023-24 upwards to 6.3 percent from 6.1 percent projected in July 2023. This reflects increasing global confidence in India’s economic prowess at a time when global growth projection for 2023 remains unchanged at three percent.

As per the IMF, India is likely to become the third-largest economy in 2027 and it is also estimated that India’s contribution to global growth will rise by 200 basis points in five years. Moreover, various international agencies such as the World Bank, the IMF, OECD, and ADB project India to grow between 6.4 percent, 6.3 percent, 6.1 percent, and 6.7 percent, respectively in 2024-25.

The Finance Minister stated that strong growth in economic activity has imparted buoyancy to revenue collections and pointed out that GST collection stood at ₹1.65 lakh crore in December 2023. This is the seventh time that gross GST revenues have crossed ₹1.6 lakh crore benchmark.

She said, coming to 2024-25, the total receipts other than borrowings and the total expenditure are estimated at ₹30.80 and 47.66 lakh crore respectively. The tax receipts are estimated at ₹26.02 lakh crore.  

In a major announcement, the Finance Minister said, the scheme of 50-year interest-free loans for capital expenditure to states will be continued this year with a total outlay of ₹1.3 lakh crore. A provision of seventy-five thousand crore rupees as a fifty-year interest-free loan is proposed this year to support the milestone-linked reforms of Viksit Bharat by the State Governments.

Referring to the fiscal consolidation, as announced in her Budget Speech for 2021-22, to reduce the fiscal deficit below 4.5 percent by 2025-26, Sitharaman said, the fiscal deficit in 2024-25 is estimated to be 5.1 percent of GDP, adhering to that path.

Similarly, the gross and net market borrowings through dated securities during 2024-25 are estimated at ₹14.13 and 11.75 lakh crore respectively and both will be less than that in 2023-24.

Pointing out some of the bright spots of the economy, the Finance Minister informed that the Revised Estimate of the total receipts other than borrowings is ₹27.56 lakh crore, of which the tax receipts are ₹23.24 lakh crore. The Revised Estimate of the total expenditure is ₹44.90 lakh crore. The revenue receipts at ₹30.03 lakh crore are expected to be higher than the Budget Estimate, reflecting strong growth momentum and formalization in the economy.

Sitharaman also stated that the gross and net market borrowings through dated securities during 2024-25 are estimated at ₹14.13 and 11.75 lakh crore respectively and both will be less than that in 2023-24.

She announced that the FDI inflow during 2014-23 was USD 596 billion marking a golden era and this is twice the inflow during 2005-14.

For encouraging sustained foreign investment, we are negotiating bilateral investment treaties with our foreign partners, in the spirit of ‘first develop India’, the Finance Minister added.

Nirmala Sitharaman elaborated that this government’s humane and inclusive approach to development is a marked and deliberate departure from the earlier approach of ‘provisioning up-to-village level’. Development programmes, in the last 10 years, have targeted every household and individual, through ‘housing for all’, ‘har-ghar-jal’, electricity for all, cooking gas for all, bank accounts and financial services for all, in record time, she added.

She informed that PM Mudra Yojana has sanctioned 43 crore loans aggregating to ₹22.5 lakh crore for entrepreneurial aspirations. It may be mentioned that thirty crore Mudra Yojana loans have been given to women entrepreneurs.

Making a slew of announcements, Nirmala Sitharaman said, the Government will pay utmost attention to making the eastern region and its people a powerful driver of India’s growth, PM Awas Yojana (Grameen) is close to achieving the target of three crore houses and two crore more houses will be taken up in the next five years to meet the requirement arising from increase in the number of families.  Similarly, through rooftop solarization, one crore households will be enabled to obtain up to 300 units of free electricity every month.

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 sixty thousand individuals with credit linkages.

Nirmala Sitharaman announced that for our tech-savvy youth, this will be a golden era, as a corpus of rupees one lakh crore will be established with a fifty-year interest-free loan. She said the corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. This will also encourage the private sector to scale up research and innovation significantly in sunrise domains, she added

For Railways, three major economic railway corridor programmes will be implemented energy, mineral, and cement corridors, port connectivity corridors, and high-traffic density corridors. Moreover, forty thousand normal rail bogies will be converted to the Vande Bharat standards to enhance the safety, convenience, and comfort of passengers.

In the Aviation Sector, the number of airports has doubled to 149 and today 517 new routes are carrying 1.3 crore passengers. Indian carriers have proactively placed orders for over 1000 new aircraft.

Nirmala Sitharaman announced that the Government will form a high-powered committee for an extensive consideration of the challenges arising from fast population growth and demographic changes and the committee will be mandated to make recommendations for addressing these challenges comprehensively about the goal of ‘Viksit Bharat’.