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- Published: February 1, 2024 13:03
New Delhi: Presenting the Union Budget 2023, Union Finance Minister Nirmala Sitharaman on Thursday pegged the fiscal deficit target for 2024-25 at 5.1 per cent of gross domestic product (GDP).
In 2023-24, the government pegged the fiscal deficit target for 2023-24 at 5.9 per cent of gross domestic product (GDP). Today, Sitharaman said that the fiscal deficit of 2023-24 was downwardly revised to 5.8 per cent.
The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings that may be needed by the government.
The government intends to bring the fiscal deficit below 4.5 per cent of GDP by the financial year 2025-26.
Further, in relief to the citizens, the central government neither tweaked nor raised tax burden on citizens.
“As for tax proposals, in keeping with the convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties,” said Sitharaman.
“However, certain tax benefits to start-ups and investments made by sovereign wealth or pension funds as also tax exemption on certain income of some IFSC units are expiring on 31.03.2024. To provide continuity in taxation, I propose to extend the date to 31.03.2025.”
The government proposed to increase capital expenditure outlay by 11.1 per cent to Rs 11.11 lakh crore in 2024-25.
A capital expenditure, or capex, is used to set up long-term physical or fixed assets.
Last year, which was the last full Budget under the Prime Minister Narendra Modi-led government’s second term, the government proposed to increase capital expenditure outlay by 33 per cent to Rs 10 lakh crore in 2023-24, which was estimated to be 3.3 per cent of the GDP.
With the substantial increase in capex, it is central to the government’s efforts to enhance growth potential and job creation, crowd in private investments and provide a cushion against global headwinds.
The interim budget, tabled today, will take care of the financial needs of the intervening period until a government is formed after the Lok Sabha polls after which a full budget will be presented by the new government in July.
With this Budget Presentation, Sitharaman equalled the record set by former Prime Minister Morarji Desai, who as finance minister, presented five annual budgets and one interim budget between 1959 and 1964.
The Budget Session of Parliament commenced on Wednesday with President Droupadi Murmu addressing a joint sitting of Lok Sabha and Rajya Sabha.
In her address to Parliament, the President said the year 2023 was a historic year for the country and among other steps, the country kept up the momentum of being the fastest-growing major economy.
The Indian economy is projected to grow close to 7 per cent in the financial year 2024-25 which starts this April, said the Ministry of Finance in a review report.
India’s economy grew 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22. The Indian economy is expected to grow 7.3 per cent in the current financial year 2023-24, remaining the fastest-growing major economy.