Finance Minister Nirmala Sitharaman presented the Union Budget 2024–25 to the Parliament on Tuesday. Despite increased funding for social welfare programs as a result of strong tax receipts in a rapidly expanding economy, Sitharaman maintained the budget deficit at 4.9% of GDP.
Maintaining the fiscal consolidation route will contribute to the economy’s stable growth trajectory since a smaller deficit helps control inflation.
“It is expected that during 2024–25, gross and net market borrowings through dated securities will be Rs 14.01 lakh crore and Rs 11.63 lakh crore, respectively. Both will be lower than the estimates for 2023–2024, the Minister of Finance declared.
Because the government is borrowing less, there will be more money available in the banking system for businesses to borrow for investments, which will support economic development and job creation.
Additionally, Sitharaman stated that the expected total receipts (excluding borrowings) and total expenditures for the fiscal year 2024–25 are Rs. 32.07 lakh crore and Rs. 48.21 lakh crore, respectively. It is expected that net tax revenues will be Rs 25.83 lakh crore.
During her 80-minute Budget address, the Finance Minister stated, “We aim to reach a deficit below 4.5 per cent next year. The fiscal consolidation path announced by me in 2021 has served our economy very well.”
She said that the administration is dedicated to continuing with its budget consolidation plan.
The Finance Minister stated, “Starting in 2026–2027, our goal is to maintain a budget deficit each year so that the Central government debt is decreasing as a share of GDP.”
In her address, she also mentioned how GST has been a “success of vast proportions.”
“We will work to further simplify and rationalize the tax structure and endeavor to expand it to the remaining sectors in order to multiply the benefits of GST.”
“The Goods and Services Tax (GST) has resulted in lower tax incidence for the general public, decreased trade and industry logistics costs and compliance burdens, and increased central and state government revenue,” the speaker continued.
The Finance Minister also stated that although the world economy is doing better than anticipated, policy uncertainty still has sway over it.
She stated that there are still major risks to growth on the downside and risks to inflation on the upside due to elevated asset values, political unpredictability, and shipping delays.
India’s economic development is still the bright spot in this setting and will continue to be in the coming years. India’s inflation rate is still low, steady, and approaching the objective of 4%. Core inflation, which excludes fuel and food, is 3.1% at the moment. The Finance Minister said, “Measures are being taken to guarantee that supplies of perishable goods reach the market adequately.”
