Interim budget 2024-25: Nothing remarkable

It is that time of the year when the finance minister and her army of bureaucrats prepare and present the government's budget. The media gathers every economic and financial bigwig, dissecting what the government has to offer to the aam janta .

But this year, things are slightly different. With the general election on the horizon, this budget is an interim budget. Essentially, the government will specify how it plans to spend until the time the new government is in place. So, there are no headline-grabbing announcements this time.

Nevertheless, there is much to talk about. India is the fastest-growing large economy in the world. We have witnessed significant transformations in the past decade. The government has set an ambitious vision of becoming a developed country by 2047, marking 100 years of our independence. To that end, Finance Minister Nirmala Sitharaman laid out the strategy for India's Amrit Kaal .

So, let's go through some of the key highlights from the interim budget.

Commitment to meet 'Net Zero' goals by 2070

• Funding will be provided for harnessing offshore wind energy potential for an initial capacity of one giga-watt.
  
• To reduce imports of natural gas, methanol and ammonia, a coal gasification and liquefaction capacity of 100 MT will be established by 2030.
  
• Mandating the blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG).
  
• Financial assistance for the procurement of biomass aggregation machinery.

Other sustainable development plans

• Through rooftop solarisation, one crore households will be provided up to 300 units of free electricity per month. This is expected to help households save up to Rs 15,000 to Rs 18,000 annually.
  
• The adoption of e-buses will be increased to support the electric vehicle ecosystem.
  
• Strengthen the e-vehicle ecosystem by supporting manufacturing and charging.
  
• A new scheme for bio-manufacturing and bio-foundry will be launched to promote green growth.
  
• To promote climate-resilient activities for blue economy 2.0, a scheme for restoration and adaptation measures and coastal aquaculture and mariculture with an integrated and multi-sectoral approach will be launched.

Infrastructure

• The government has budgeted a capital expenditure outlay of Rs 11.11 lakh crore (about 3.4 per cent of GDP). This represents an increase of 11.1 per cent from the previous year.
  
• Three economic railway corridor programmes will be implemented to improve logistics efficiency and reduce costs. These are (a) energy, mineral & cement corridors, (b) port connectivity corridors and (c) high-traffic density corridors.
  
• Around 40,000 regular rail bogies will be converted into Vande Bharat standards to enhance passengers' safety, convenience and comfort.
  
• The government will also speed up the development of new airports and promote urban transformation through metro and NaMo Bharat trains.

Housing

• Under the Pradhan Mantri Awas Yojna, an additional target of building two crore houses has been set for the next five years.
  
• A scheme for the middle-class people who live in rented houses, chawls, slums or unauthorised colonies will be launched, which will help them either buy or construct their own homes.

Agriculture

• Nano-DAP (Di-ammonium phosphate) will be expanded in all agro-climatic zones to promote growth in the agricultural sector.
  
• In line with the initiative announced in 2022, a strategy to achieve ' atmanirbharta ' for oil seeds like mustard, groundnut, sesame, soybean and sunflower will be established.
  
• Under the Pradhan Mantri Matsya Sampada Yojna, the government aims to enhance aquaculture productivity from three to five tons per hectare. It also aims to double the exports to one lakh crore.
  
• Five integrated aquaparks will be set up.

Other

• The target of Lakhpati Didi (aimed at economic independence and empowerment of women in various Self Help Groups) has been revised from two to three crore.
  
• A corpus of Rs 1 lakh crore will be established to promote research and innovation to drive growth. It will provide long-term financing or refinancing with long tenors and low or nil interest rates to younger minds of the country. This is primarily aimed at sunrise industries.
  
• A new scheme will be launched to strengthen deep-tech technologies for defence purposes and expedite ' atmanirbharta '.
  
• A provision of Rs 75,000 crore is proposed to support milestone-linked reforms by the State Governments. These will be distributed as 50-year interest-free loans.

Direct tax

Unlike 2023, when the introduction of the new tax regime invited major debates and discussions, this budget was relatively quiet on the personal finance front.

No new tax proposals were introduced. The old tax rates have been retained, too.

Here are the tax rates for your reference.

As per the old tax regime, senior citizens between 60 and 80 enjoy nil tax rates up to Rs 3 lakh. Further, those aged 80 years and above enjoy nil tax rates up to Rs 5 lakh.

The rebate limit remains Rs 5 lakh and Rs 7 lakh under old and new tax regimes, respectively.

If you are unsure which tax regime is more beneficial for you, head over to our tax calculator and find out for yourself.

However, one of the positives was improving the ease of living and doing business for taxpayers. The direct tax demands up to Rs 25,000 of periods up to FY09-10 and up to Rs 10,000 for FY10-11 to FY14-15 have been withdrawn. This move is expected to benefit around one crore taxpayers.

How the government earns and spends

For those interested in the numbers, below are some graphs showing the revenue sources and their application.

And here is how the government's finances stack up.

Allocation to major schemes

• Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA): Rs 86,000 crore
  
• Ayushman Bharat PM-JAY: Rs 7,500 crore
  
• Production Linked Incentive Scheme (PLI): Rs 6,200 crore
  
• Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem: Rs 6,903 crore
  
• Solar Power (Grid): Rs 8,500 crore
  
• National Green Hydrogen Mission: Rs 600 crore

Top three ministries in terms of allocation

• Ministry of Defense: Rs 6.2 lakh crore
  
• Ministry of Road Transport and Highways: Rs 2.8 lakh crore
  
• Ministry of Railways: Rs 2.6 lakh crore