Budget 2024 Analysis | What did Middle Class get? | Dhruv Rathee
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Highlights of the Union Budget 2024
- The Union Budget 2024 was presented by Finance Minister Nirmala Sitharaman as an Interim Budget.
- The Interim Budget provides estimates for the entire year and will be followed by a full budget presentation after the Lok Sabha elections.
- The main focus of the budget was on Capital Expenditure (CAPEX), with an 11.1% increase from the previous year's allocation.
- The government plans to spend ₹11.11 trillion on long-term assets, including infrastructure projects like roads, railways, ports, and buildings.
- ₹2.55 trillion has been allocated for railways, with the announcement of 3 new corridors and the conversion of 40,000 normal rail coaches to Vande Bharat standards.
- The budget also highlighted the Atmanirbhar Oil Seeds Abhiyan and the focus on fertilizers like Nano-DAP in the agriculture sector.
Summary of Budget Allocations and Initiatives
- Eco-friendly fertilizer with 8% nitrogen and 16% phosphorous promoted for Green Farming.
- Government aims to reduce edible oil imports from 60% to 30% to achieve self-reliance in seeds.
- Budget cuts in subsidies for fertilizers and food.
- Education budget increased slightly, with major cuts in funding for UGC, IITs, and IIMs.
- Increased allocation for central universities and research and innovation in education sector.
- Healthcare budget increased, with focus on expanding Ayushman Bharat scheme and cervical cancer vaccine.
- Increase in allocation for Prime Minister Awas scheme for affordable housing.
- Projected real GDP growth rate for 2023-2024 at 7.3%.
Analysis of GDP growth rate and fiscal deficit in India
- The real GDP growth rate in India is currently at 6.5% due to a nominal GDP growth rate of 10.5% and an inflation rate of 4%.
- International agencies have projected similar growth rates for India, with the IMF projecting a growth rate of 6.3% for 2023 and the World Bank, OECD, and ADB projecting growth rates of 6.4%, 6.1%, and 6.7% respectively for 2024-25.
- The RBI had previously projected a GDP growth rate of around 7% for India, but it is now near 6.5%.
- Data scientists play a crucial role in analyzing patterns in data and predicting a country's growth, making data science a lucrative career option.
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- The budget also focuses on reducing the fiscal deficit, which is the difference between the government's revenue and expenditure.
- India's fiscal deficit is estimated to be ₹17.86 trillion, with a target of 5.8% of GDP for this year.
Key Points from the Indian Government Budget and Economic Promises
- One-third of the government's earnings are spent on interest servicing.
- The government will spend ₹11.9 trillion on interest servicing this year, an increase of ₹1.35 trillion from last year.
- Income Tax is the largest revenue generator for the government at 19%, followed by GST at 18%, and Corporate Tax at 17%.
- Borrowing money is the biggest source of income for the government at 28%.
- The Finance Minister aims for India to become a developed nation by 2047 and a $7 trillion economy by 2030.
- Previous promises, such as making India a $5 trillion economy by 2024, have not been fulfilled.
- The government's budget focuses on the welfare of poor people, women, youth, and farmers.
India's Data Transparency and Economic Challenges
- India's ranking in the Hunger Index is falling, currently at 111 out of 125.
- Youth Unemployment is at 45% for ages 20-24.
- Women's labor participation in India's workforce has decreased from 32% in 2005 to 19% in 2021.
- Household income across various sections in India has shown disparities, with the richest 20% experiencing a 40% increase in income.
- Middle-class, lower middle-class, and poor individuals have seen a decrease in income, affecting the poorest 20% the most.
- Access to official public data on income and consumption inequality in India is becoming increasingly difficult.
- The government lacks data on various crucial issues such as offshore shell companies, farmer deaths in protests, difficulties faced by migrants during COVID, mob lynching incidents, and the number of MSMEs that closed during lockdown.
- Opposition leaders have criticized the government for its lack of data transparency, dubbing it "NDA means No Data Available."
Key Highlights of the Union Budget 2024
- Interim Budget presented by Finance Minister Nirmala Sitharaman.
- Focus on Capital Expenditure (CAPEX) with an 11.1% increase from the previous year's allocation.
- ₹11.11 trillion allocated for long-term assets including infrastructure projects.
- ₹2.55 trillion allocated for railways, with the announcement of new corridors and coach conversions.
- Emphasis on Atmanirbhar Oil Seeds Abhiyan and eco-friendly fertilizers in agriculture sector.
- Budget cuts in subsidies for fertilizers and food.
- Slight increase in education budget, with major cuts in funding for UGC, IITs, and IIMs.
- Increased allocation for central universities and research and innovation in education sector.
- Healthcare budget increased, with focus on expanding Ayushman Bharat scheme and cervical cancer vaccine.
- Increase in allocation for Prime Minister Awas scheme for affordable housing.
- Projected real GDP growth rate for 2023-2024 at 7.3%.
- Reduction in fiscal deficit targeted, estimated at 5.8% of GDP.
- Income Tax, GST, and Corporate Tax are major revenue generators for the government.
- Emphasis on becoming a developed nation by 2047 and a $7 trillion economy by 2030.
- Concerns over rising hunger, youth unemployment, and decreasing women's labor participation.