I'm nothing special; I'm just me. That's the sum and substance of Budget 2024. Unbelievably, that's a first in Indian history.
There were no election promises and certainly no pork-barreling, which makes this budget a simple meet-the-expenditure vote-on-accounting statement, as it should be.
Often, the temptation to launch into a pre-election spending blitz runs high. But that's for an incumbent government on last breath. On Thursday, however, Finance Minister Nirmala Sitharaman presented a 'I owe nobody nothing' kind of interim budget that'll survive only till June-July. In fact, all interim budgets share the same fate, but by avoiding populism, Sitharaman sent out the surest signal of getting re-elected this May.
At the outset, she listed four focus groups -- poor, women, youth and farmers. But that's that. None received any special gestures. Grand promises weren't included. Impractical ones, neither.
Thursday's budget also stood out for its shortest budget speech. That's because, unlike her previous speeches, Sitharaman came to talk about just two things and not make 25 endless announcements. One, to present the income-expenditure statement for next fiscal year FY25. And two, to gloat over the government's ten-year economic report card. In the ordinary course, the opposition would criticize these very achievements as a line of zeroes, but on Thursday, there was no needless disruption as if the whole floor was in agreement. The remainder of the speech saw a smattering of smaller initiatives for startups, taxpayers and voters.
As for growth, the Indian economy seems ready to ride the seven-horse chariot with sustainable, inclusive, 7% growth in coming years. Keeping up with the spirit, Sitharaman reiterated the government's goal of a developed India by 2047, with 'sky is the limit,' thrown in twice. However, she refrained from setting herself a numerical target like $10 trillion and so on, and instead vowed to ensure well-being of the people redefining GDP as Governance, Development and Performance.
She then announced a 11.1% increase in capital expenditure for FY25 at Rs 11.11 lakh crore. Capex has been the distinctive features of Sitharaman's budgets and though the budget estimate for FY25 saw a jump over FY24, the annual increase is significantly lower than the previous years. While some may view it as the end of the capex boom, the fact is, as Sitharaman mentioned, the private investment is finally coming around.
The biggest takeaway was the reduction in fiscal deficit. If the FY24 deficit number lowered to 5.8% was heartening, FY25's projected 5.1% as against the consensus estimate of 5.25-5.5%, was like an unclaimed deposit waiting to be tapped. If every decimal point increase in deficit gathers the heat of a hundred suns, the faster-than-expected reduction melts like snow. Predictably, the 10-year benchmark yield fell 9 bps on Thursday seconds after the budget announcement.
In all, Sitharaman presented a Rs 47.66 lakh crore expenditure budget for FY25. Tax receipts are estimated at Rs 26.02 lakh crore, while borrowings are pegged at Rs 14.13 lakh crore. The revised expenditure estimates for FY24 stood at Rs 44.90 lakh crore, while tax receipts will likely punch in higher at Rs 30.03 lakh crore.
Though there were no changes in direct and indirect taxes, Sitharaman managed to pull a rabbit out the hat. Given that there have been outstanding tax demands dating back to 1962, she decided to withdraw petty demands of up to Rs 25,000 till FY2010 and Rs 10,000 after FY2010. With a sense of fulfilment, Sitharaman said the move will benefit one crore taxpayers, though she stopped short of disclosing the likely revenue to be foregone.
In the same breath, she extended tax incentives for startups, while tax exemptions towards Gift City will be extended to 2025 from 2024. As for tech-savvy youth, Budget 2024 announced a corpus of Rs 1 lakh crore that will provide long-term interest-free financing to encourage private sector to scale up innovation.
Then there were some more announcements like affordable housing scheme for the middle class, 300 units free solar power for one crore households every month, and some such. That said, there were neither extraordinary announcements nor any poetic flourishes. Unlike last year's speech that saw the house breaking into laughter, Thursday's speech was rather plain Jane.
In sum, Budget 2024 dares to be boring, though Sitharaman seasoned it well with substance and sincerity.
