The Union budget is the annual financial report of India, an estimate of income and expenditure of Government of India on a periodical basis. As per Article 112 of the Constitution   it   is   a   compulsory   task   of   the   Union   Government.

The first budget of India was presented on 18th February 1860 by Mr. Scotsman James Wilson. The First budget of independent India was presented by Sh. RK Shanmukham Chattiy on 26th November  1947.

The Union budget is prepared by the Union Finance Ministry and is presented by the Union Finance Minister in the Parliament on 1st February of every year.

Previously, the Union budget used to be presented on the last day of February each year, but the Modi government changed this date to 1st February of every year from the year 2017 so that the legislative approvals for annual spending plans and tax proposals could be completed before the beginning of the new financial year on 1st April. There used to be a separate Rail Budget as well, but the Modi Government withdrew the practice of separate rail budget and general budget. Now only the general budget is introduced in parliament every year from the year 2017.

Sh. Moraji Desai presented the Union budget for maximum number of times (10 times).

The Union finance Minister Smt. Nirmala Sita Raman presented her 7th regular budget for the year 2024-2025 in the parliament on 23rd July, 2024. This is her 7th budget. This is our paperless budget presented on tab (Tablet) kept inside traditional Bahi Khata instead of briefcase. As 2024 being an election year the Union finance minister also presented her 2nd Union interim budget or (Vote on account) on 1st February, 2024.

Size of  the Union Budget 2024-25

• Size of the Union budget- 21 Lakh Crores estimated to be spent by Union Government during the year 2024-2025

What is an Interim Budget?

An interim budget is presented by the government of India in the run-up to the general elections.

• Interim budgets are usually focused on outlining the government’s proposed spending plans for the next few months rather than for the entire fiscal
• It is  a  statement  of  the  government’s  financial  position  and includes estimates of revenue and expenditure for the next financial year but does not include any new policy announcements or proposed tax
• The logic behind the interim budget is that the government which presents the interim budget may not be in power when the full budget is presented later in the year.
• The incoming government, which will hold power after elections, typically presents its own full budget after the general election

Constitutional Provisions

• According to Article 112 of the Indian Constitution, the Union Budget of a year is referred to as the Annual Financial Statement (AFS).
• It is a statement of the estimated receipts and expenditure of the Government in a Financial Year (which begins on 1st April of the current year and ends on 31st March of the following year).
• Overall, the Budget contains:
  • Estimates of revenue and capital receipts,
  • Ways and means to raise the revenue,
  • Estimates of expenditure,
  • Details of the actual receipts and expenditure of the closing financial year and the reasons for any deficit or surplus in that year, and

• The economic and financial policy of the coming year, i.e., taxation proposals, prospects of revenue, spending programme and introduction of new schemes/projects.

• The Budget Division of the Department of Economic Affairs in the Ministry of Finance is the nodal body responsible for preparing the

Estimate of sources of Income and Expenditure of Union Government (2024-2025)

Income from Income Tax is estimated to be the biggest source of revenue of Union Government (19%) followed by GST (18%) in the financial year 2024-25.

• When it comes to the expenditure the highest amount goes towards state share of taxes and Duties (21%) followed by the interest payment (19%), and expenditure on defence will be 8% of the total expenditure

Budget Theme

• Focus on EMPLOYMENT, SKILLING, MSMES, AND THE MIDDLE CLASS.
• Announcement of Prime Minister’s package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 Cr youth over a 5-year period with a central outlay of INR 2 Lakh Cr.
• Provision of INR 48 Lakh Cr for education, employment and skilling.

Budget Priorities

In line with the Viksit Bharat strategy set out in the interim budget, the budget envisages sustained efforts on the following 9 priorities for generating ample opportunities for all.

• Productivity and resilience in Agriculture
• Employment & Skilling
• Inclusive Human Resource Development and Social Justice
• Manufacturing & Services
• Urban Development
• Energy Security
• Infrastructure
• Innovation, Research & Development and
• Next Generation Reforms

Budget Estimates

• Total receipts other than borrowings: `32.07 lakh
• Total expenditure: `48.21 lakh
• Net tax receipt: `25.83 lakh
• Fiscal deficit: 9 per cent of GDP.

Budget Highlights (2024-2025)

1. INCOME TAX

FM announces changes in new tax regime

1. Standard deduction proposed to increase from ₹50,000 to ₹75,000
2. Deduction on family pension for pensioners enhanced from ₹15,000 to

₹25,000

In new tax regime, tax rate structure to be revised to:

(in Rs)

0-3Lakh                                  rupees……………………………………………………………………… Nil

3-7Lakh                                 rupees……………………………………………………………………… 5%

7-10Lakh                              rupees…………………………………………………………………… 10%

10-12Lakh                           rupees…………………………………………………………………… 15%

12-15Lakh                         rupees…………………………………………………………………….. 20%

15Lakh rupees & above…………………………………………………………………………. 30%

Salaried employee in new tax regime will save up to 17,500 in income tax, said FM.

2.   WHAT IS CHEAPER

• Cancer drugs
• Medical X-ray machines
• Mobile phones, chargers
• Equipment using solar cells, panels
• Fish and shrimp feed
• Leather goods
• Footwear
• Textiles
• Gold, silver, platinum making charges

3.   WHAT IS COSTLIER

• Ammonium nitrate
• Cigarette
• Plastic Goods
• Petrochemicals
• Air Travel
• Poly Vinyl Chloride

4.   EMPLOYMENT AND SKILLING

PM PACKAGE 2 lakh crore for five schemes; ₹1.48 lakh crore for education, employment, and skilling.

JOB CREATION

• Employees’ Provident Fund Organization (EPFO) incentives, ₹15,000 Direct Benefit Transfers (DBT) for new hires
• Employer reimbursement: ₹3,000/month for two years
• Targets: 50 lakh jobs, 30 lakh
• Internships for one crore youth, rental housing in public-private partnership (PPP) mode.

5.   WOMEN EMPOWERMENT

Priority on increasing workforce participation. ₹3 lakh crore were provided for women and girls’ schemes, including hostels and skilling programs.

6.   AGRICULTURE AND RURAL DEVELOPMENT

• Agriculture: ₹52 lakh crore allocated to agriculture sector; focus on productivity and climate-resilient varieties.
• Rural Development: ₹66 lakh crore allocated for the rural development. Initiative to introduce 1 crore farmers to natural farming over 2 years.

7.   BIHAR AND ANDHRA PRADESH

• BIHAR

External      assistance      expedited.      Funding      for     airports,      medical facilities, sports infrastructure, and ₹26,000 crore for highways

• ANDHRA PRADESH

₹15,000 crore allocated. Additional support for Pollavaram irrigation project and other capital investments.

Package    of    PM’s    five    schemes    for   Employment     and skilling

Prime Minister’s package of 5 Schemes and Initiatives for employment, skilling and other opportunities for 4.1 crore youth over the period of 5 – years period.

1. Scheme A – First Timers: One month salary of up to ’15,000 to be provided in 3 instalments to first – time employees, as registered in the
2. Scheme B – Job creation in Manufacturing: Incentive to be provided at specified scale directly, both employee and employer, with respect to their EPFO contribution in the first 4 years of employment.
3. Scheme C – Support to employers: Government to reimburse up to ‘3000 per month for 2 years towards EPFO contribution of employers, for each additional employee.
4. New centrally sponsored scheme for Skilling
   • 20 lakh youth to be skilled over a 5 year
   • 1,000 Industrial Training Institute to be upgraded in hub and spoke arrangements.
5. New Scheme for Internships in 500 Top companies to 1 crore youth in 5 years.

Notable Facts:-

India is the 5th largest economy in the world in terms of GDP.

Other Countries

1. USA 95 trillion US $
2. CHINA 78 trillion US $
3. GERMANY 43 trillion US $
4. JAPAN 23 trillion US $
5. INDIA 73 trillion US $

We will be the 4th Largest Economy by the end of 2024 and 3rd largest economy in 2029. We want to make India a 5 trillion US $ economy by 2029 and a developed country by 2047. When Modi Government came to power in 2014, our position was tenth in the world in terms of GDP.