Government to spend ₹ 15.27 lakh crore for major sectors: Union Budget

Mangalore Today News Network / NDTV

New Delhi, July 23, 2024: The government has allocated ₹ 15.27 lakh crore for major sectors, ranging from defence and rural development to social welfare and commerce, Finance Ministry data said Tuesday afternoon, shortly after Finance Minister Nirmala Sitharaman delivered a record seventh budget of her tenure.

The data also indicated that around 21 per cent of government expenditure goes to paying states’ share of taxes and duties. Around 19 per cent is spent on interest payments and 16 per cent on central sector schemes, with subsidies, pensions, and other payments contributing 19 per cent.

 

Government revenue is divided between borrowings and other liabilities, which accounts for a massive 27 per cent of the incoming cash, income tax revenue of around 19 per cent, and GST and other taxes of around 18 per cent. Corporation taxes account for around 17 per cent, the data showed.

Defence

Of the total amount, the government has allocated nearly 30 per cent, or ₹ 4.54 lakh crore for the defence sector. This is a significant drop from the ₹ 6.21 lakh crore set aside in the interim budget.

In the interim budget - presented by Ms Sitharaman in February as a stop-gap ahead of the April-June general election - the government spoke of "deep-tech" technologies in the military domain.

In the interim budget a total of ₹ 1.72 lakh crore was set aside for the military for capital expenditure; this usually includes purchase of weapons and ammunition, aircraft, and warships.

For FY2023/24, the allocation for military capital outlay was ₹ 1.62 lakh crore.

Rural Development

Overall, the FY24/25 allocation is also lower than the ₹ 5.94 lakh crore in last year’s budget.

The next highest provision on this list is ₹ 2.66 lakh crore for rural development.

This will include expenditure on rural infrastructure projects and increased outlay for the popular MGNREGA, or the Mahatma Gandhi National Rural Employment Guarantee Act.

Funding for MGNREGA has increased from ₹ 60,000 crore in FY24 to ₹ 86,000 in FY25.

In the interim budget, the Rural Development Ministry had been given nearly ₹ 1.85 lakh crore, including ₹ 7,000 lakh crore from the balance of the Agriculture Infrastructure and Development Fund for purposes of financing the PMGSY. The budget outlay for FY24 was ₹ 1.57 lakh crore.

Agriculture, Allied Activities

Agriculture and allied activities will be given a budget of ₹ 1.52 lakh crore, Ms Sitharaman said.

In her speech the Finance Minister outlined initiatives that focus on sustainable practices - including guiding one crore farmers to ’natural farming’, digital infrastructure, and increased production.

This move towards natural farming is to promote sustainable agricultural practices and reduce dependency on chemical fertilisers and pesticides. Natural farming not only enhances soil health and biodiversity, but also reduces cost of cultivation, thus increasing farmers’ profitability.

Home Affairs

A total of ₹ 1.51 lakh crore has been set aside for the Union Home Ministry.

A chunk of this is for central police forces, such as the CRPF (Central Reserve Police Force), BSF (Border Security Force), and CISF (Central Industrial Security Force), which are, between them, responsible for internal security, guarding the borders, and securing vital installations like airports.

Also, ₹ 42,277 crore has been allocated to the Union Territory of Jammu and Kashmir that, for now, under the direct control of the centre. ₹ 5,985 crore has been given to Andaman and Nicobar, ₹ 5,862 crore to Chandigarh, and ₹ 5,958 crore to Ladakh, among provisions for other UTs.

Education

The government has set aside ₹ 1.26 lakh crore for education, which Ms Sitharaman said is among the core focus areas for the 2024 Union Budget and those to follow.

These will include financial support for loans for higher education - up to ₹ 10 lakh - to help youth who may not otherwise be eligible for benefits under other government schemes and policies.

In addition, the government has also set aside ₹ 1.48 lakh crore for schooling, employment, and skilling, which are part of the aforementioned core focus areas.

IT And Telecom

Rs 1.16 lakh crore has been budgeted for the Department of Telecommunications. This is a 24 per cent increase from FY24 and almost as large an increase from the amount in the interim budget.

Ahead of the budget presentation today telecom service providers had called for measures to help carry forward and offset losses for as much as 16 assessment years. For now this is capped at eight.

The Ministry of Electronics and Information Technology will get around ₹ 22,000 crore.

Health

The government has allocated ₹ 89,287 crore for the country’s healthcare system.

It is only marginally higher than the ₹ 88,956 crore in FY24.

This year, the government has also allocated ₹ 2,143 crore for the pharmaceutical industry.

Among the big announcements in this space was that three more cancer medications have been exempted from customs duties. In March, after the interim budget, the government had exempted Merck’s Pembrolizumab (Keytruda), used for cervical cancer, from BCD, or basics custom duty.

Normally medicines attract five to 10 per cent BCD.

Energy

Energy budget allocation has been set at ₹ 68,679 crore.

This includes ₹ 19,100 crore for the Ministry of New and Renewable Energy, up from ₹ 12,850 in the interim budget. It also includes ₹ 8,500 crore allocated for solar power (grid) - a massive jump of 79 per cent from revised estimates of last year’s budget. Solar energy was a major beneficiary in this budget, with allocation up from ₹ 6,042 crore last year to an impressive ₹ 16,400 crore today.

In line with this, Ms Sitharaman said she would expand list of exempted goods for manufacture of solar cells and panels. This will give one crore households 300 units of free electricity per month.

The budgetary allocation for energy generation comes amid a sustained increase in power demand, particularly when parts of the country face heat waves, as northern India does this year.

A report by the International Energy Agency last week said India’s electricity demand may surge by as much as eight per cent this year.

Nirmala Sitharaman’s Seventh Budget

Ms Sitharaman this morning presented her seventh Union Budget, and the first of Prime Minister Narendra Modi’s third term. Among the major highlights were tweaks to the new tax regime slabs, including raising standard deduction from ₹ 50,000 to ₹ 75,000.

As a result, the Finance Minister told Parliament, salaried employees can save as much as ₹ 17,500 in the new regime.

Budget 2024 also had good news for first-time professionals. Ms Sitharaman said the government will give one month’s salary to those joining their first job. This will be provided as a Provident Fund contribution subject to a maximum of ₹ 15,000. This, she said, will benefit 210 lakh youngsters.

Budget 2024 also proposed raising the limit of exemption of capital gains on some financial assets to ₹ 1.25 lakh per year. The Finance Minister also said the angel tax will be cut for all investor classes.