Interim budget seeks to build bridges, empower citizens

interim budget seeks to reduce fiscal deficit
Combining fiscal prudence with strategic investments, the interim budget seeks to create opportunities, enhance infrastructure, and promote social well-being.

The interim budget for financial year 2024-25 focuses on empowering the nation’s youth and women while also practicing prudent budget management. This strategic blend seeks to meet key demographic needs while ensuring financial stability. Initiatives to boost capital expenditure aim at providing opportunities for the young population, fostering growth and economic participation. Concurrently, programmes for women’s empowerment are designed to enable them achieve their full potential and contribute to a more inclusive society. Finance minister Nirmala Sitharaman has cut the fiscal deficit target for FY25 to 5.1% of the GDP without major alterations in direct and indirect tax rates.

Over the last decade, the government has pursued inclusive support. Direct transfers of 34 lakh crore rupees into citizens’ accounts have saved 2.7 lakh crore rupees in operational costs. The PM-SVANidhi scheme has provided loans to 78 lakh street vendors, with 2.3 lakh receiving a third loan. The PM-JANMAN Yojana targets underserved tribal communities, while the PM-Vishwakarma Yojana supports artisans in 18 trades. The PM-KISAN SAMMAN Yojana provides annual financial support to 11.8 crore farmers, including small and marginal farmers, and 4 crore farmers benefit from the PM Fasal Bima Yojana crop insurance.

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The budget further bolsters its focus on young people by establishing skill development centres in 750 districts and launching an app-based platform for internship opportunities. These initiatives aim to equip the youth with valuable skills and connect them with relevant job opportunities, fostering their employability and contribution to the nation’s growth.

Additionally, the expansion of the “Beti Bachao, Beti Padhao” program and initiatives like the National Mission for Empowerment of Women further demonstrate the government’s commitment to empowering women across education, entrepreneurship, and leadership roles. By investing in their potential, the budget paves the way for a more inclusive and dynamic workforce.

READBudget 2025 bets on infrastructure, fiscal prudence

Interim budget and welfare schemes

In the last decade, the government has facilitated women entrepreneurs with 30 crore loans under the Mudra Yojana scheme and increased female enrolment in higher education by 28%. Remarkably, women now make up 43% of enrolments in STEM courses, positioning India at the forefront of the global movement for gender parity in education and entrepreneurship.

The government plans to install rooftop solar panels in one crore homes, offering up to 300 units of free electricity per month per household, leading to annual savings of Rs. 15,000-18,000. This initiative not only promotes clean energy but also boosts the demand for solar panel installation, creating employment opportunities in the solar energy sector.

A new programme seeks to assist those in leased homes, slums, chawls, or unauthorised colonies in acquiring their own homes. The budget for the Pradhan Mantri Awas Yojana (PMAY) has been increased by 49% to ₹80,671 crore, with significant boosts for both rural and urban allocations. These efforts aim to address middle-class housing needs and enhance socio-economic well-being.

The government’s health initiatives include leveraging existing hospital infrastructure for new medical colleges, promoting cervical cancer prevention, consolidating maternal and child care schemes, expanding the immunisation programme, and extending healthcare coverage under Ayushman Bharat to frontline health workers. These measures aim to enhance healthcare access and quality.

The government continues to support the agriculture sector and farmers’ income through schemes that promote value addition, reduce post-harvest losses, and enhance productivity. Initiatives include expanding the application of Nano DAP fertilizer, aiming for self-sufficiency in oilseeds, supporting dairy farmers, and intensifying the implementation of the Pradhan Mantri Matsya Sampada Yojana to boost aquaculture productivity and exports.

The government recognises the impact of 83 lakh SHGs led by 9 crore women in rural areas, aiming to increase the number of financially independent women to 3 crore. This initiative contributes to rural development and women’s empowerment.

A ₹1 lakh crore corpus for 50-year interest-free loans will incentivise private sector investment in R&D, especially in emerging technologies and defence applications, promoting innovation and self-reliance.

Infrastructure and green energy

An 11.1% increase in capex spending to ₹11,11,111 crore aims to enhance infrastructure and economic growth, with a focus on developing economic railway corridors, upgrading train bogies, and expanding Metro Rail and NaMo Bharat projects. The doubling of airports to 149 and the expansion of the UDAN scheme highlight the growth of India’s aviation sector, with further plans to strengthen airport infrastructure and connectivity.

The government’s comprehensive plan to achieve net-zero emissions by 2070 includes harnessing offshore wind energy, establishing coal gasification plants, mandating CBG blending, and supporting biomass collection, aiming for a sustainable energy transition.

Recognising the urgency of climate change, the budget takes a multi-pronged approach to promote sustainability. The introduction of a carbon market and the Green Hydrogen Mission incentivise clean energy solutions and responsible industrial practices. Furthermore, investments in natural capital, including sustainable forest management and wetland conservation, contribute to safeguarding biodiversity and mitigating climate risks. These initiatives, coupled with efforts to promote climate-smart agriculture and circular economy practices, demonstrate the government’s commitment to building a resilient and sustainable future for generations to come.

Investments in production and charging infrastructure for electric vehicles, along with payment security features, aim to enhance public transportation networks. The development of eco-friendly alternatives such as biodegradable polymers and biopharmaceuticals aligns with a shift towards regenerative manufacturing principles, promoting climate-resilient activities for the Blue Economy 2.0.

A multifaceted approach to boosting domestic tourism includes developing iconic tourist destinations, improving infrastructure, and generating employment, with the government offering financial support to states for these initiatives.

The FDI inflow of $596 billion during 2014-23 marks a significant increase, supported by negotiations for bilateral investment treaties to encourage foreign investment. The government’s commitment to growth and development at both national and state levels includes allocating ₹75,000 crore as interest-free loans for states achieving reform milestones and forming a committee to address demographic challenges, ensuring a sustainable future.

The budget acknowledges the importance of good governance and transparency by launching a National Data Governance Policy and promoting e-governance initiatives. These measures aim to streamline administrative processes, enhance citizen participation, and combat corruption. Moreover, the formation of a committee to address demographic challenges signifies the government’s proactive approach to managing population growth, urbanisation, and an aging population. By investing in education, healthcare, and social security programs, the budget aims to ensure an equitable and prosperous future for all citizens.

(Dr Pravin Jadhav is Associate Professor at IITRAM University, Ahmedabad. Chirayu Sharma and Jalaj Shah are MBA students at Institute of Management, Nirma University.)