Finance Minister Nirmala Sitharaman presented the Interim Budget in the Lok Sabha today. In her Budget speech she spoke of the profound transformation undergone by the Indian economy over the past 10 years and asserted that citizens were looking forward to the future with optimism. Highlighting themes of Sabka Saath, Sabka Vikaas, and Atmanirbhar Bharat, Ms. Sitharaman sketched out the achievements of the current administration towards inclusive development, before laying out the measures that will tide India over for the first four fiscal months of 2024. (Since this is an election year, the Union Budget will only be presented in June-July, post the elections. )
Ms. Sitharaman noted that the government will continue on path of fiscal consolidation to reduce fiscal deficit to 4.5% in 2025-26. She announced that the capital expenditure outlay is being expanded to Rs. 11.1 lakh crore in the coming year. She did not propose any changes relating to taxation and said that the government proposes to maintain the same tax rates for direct and indirect taxes, including import duties.
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Here is a look at where the money for the Budget comes from and where it shall be allocated.
Where from
Borrowings and other liabilities form the largest chunk of where money flows in from for this Budget, at 28%. At the second spot is income tax at 19%, followed by inflow from GST and other taxes at 18%. Corporation tax also makes up a significant chunk at 17%. Non-tax revenue, union excise duties, customs and non-debt capital receipts is where the government gets the rest of its budget money from.
Where to
The government spends equal amounts in interest payments and paying out the States’ share of taxes and duties— 20%. Next on the list is central sector schemes, which snag 16% of the pie. Finance Commission and other transfers, the defence sector and centrally-sponsored schemes get about 8% each of the government’s money. Other miscellaneous expenditures take up 9%, while subsidies get 6%. Pensions round out the spend, claiming 4% of the government’s money.
